Press release The PMA Business Cycle Index (PMABCI) – April 2021

A notable improvement in West Bank and Gaza strip

The results of PMA Business Cycle Index (PMABCI) revealed a significant pickup in the overall index during April, recording -7.4 point compared to -24.1 points in March, exceeding its corresponding levels, and returning to the pre-crisis levels. 

In the West Bank, the index resumed its rise in light of controlling, partially, the spread of the epidemic and the easing of containment measures, which allowed a greater margin for economic activities, that was reflected in a better performance of the index, It picked up from -22.9 points to -5.2 points, reaching its highest since February 2020. This rebound was driven by improvement in most sub-indices headed by the trade index (from -15.8 to -5.9 points), and followed by the indices of agriculture (from 0.9 to 4.9 points) and manufacturing (from -7.3 to 3.7 points). It also was seen in the transport and storage index (from -0.6 to -0.4 points) and IT and communication index (from 0.1 to 0.3 points), albeit at lesser pace. On the other hand, the construction index was the only to witness a decrease during the month, declining (from -0.3 to -0.4 points). At the meantime, the renewable energy index stayed relatively stable at around 0.0 points.  

According to the surveyed firm owners in the West Bank, there was a fundamental increase in production level and a higher pick up in sales during April, causing a decline in the inventory. In light of that, firm owners expressed optimistic expectation in the next three months on production, and to lesser extent, on employment.

Similarly, Gazan index continued its noticeable rise during this month, increasing from around -27.0 points to -12.6 points, recording one of its highest level historically. This increase was driven by exceptional jump in the trade index (from -28.0 to -12.0 points), accompanied by lesser growth in the manufacturing index (from -3.2 to -2.6 points). However, there was a slight drop in the indices of transport and storage (from 0.9 to -0.5 points), construction (from -1.2 to -1.8 points) and IT and communication (from -0.1 to around -0.2). Meanwhile, agricultural index and renewable energy index maintained their previous levels at around 4.4 points and 0.0 point, respectively.   

In general, the owners of the surveyed firms in Gaza indicated improvement in production and to slighter extent in sales during April, which lead to accumulated inventory. This improvement has been reflected in better expectations in the near term for production and employment levels.

It is noteworthy that the extended PMABCI is a monthly index, which aims at capturing the state and evolution of economic activity in Palestine by tracking sectoral performance (especially fluctuations in production, sales and employment levels). The overall index is simply the sum of all sectoral indices. Its maximum is positive 100 points, while the minimum is minus 100 points; a positive value indicates favorable economic performance, while a negative value indicates bad performance. On the other hand, a value close to zero indicates that economic performance did not change and is unlikely to do so in the near future.