Press release The PMA Business Cycle Index (PMABCI) – November 2020

Opposite performance in the West Bank and Gaza Strip

The results of PMA Business Cycle Index (PMABCI) revealed that the overall index has relatively stabilized at the previous month level, registering around -29.0 points. This comes as a result of the opposite performance of the two geographical regions (Northern and Southern governorates). Moreover, the overall index is still below both the pre-coronavirus crisis levels and the corresponding level of the last year.

In the Northern Governorates (West Bank), the index has continued its gradual improvement, picking up to -21.4 points compared to -26.4 points in last October. This was resulted as all sectoral indices improved, except for the minor decline in the construction index from -1.6 to -1.7 points and transportation and storage index from          -0.8 to -0.9 points. The trade index registered the biggest hike (from -13.4 to -9.4 points), followed by the agriculture index (from -3.6 to -2.7 points). Meanwhile, the increases in the remaining sectors were lesser; (from -0.3 to -0.2 points) for the IT and communication index, (from -6.6 to -6.5 points) for the manufacturing index and (from -0.1 to 0.0 points) for the renewable energy index.

In general, the surveyed firm owners in the Northern Governorates indicated a moderate improvement in sales levels during November. At the same time, they expressed a higher optimism about the near future, expecting higher production and employment in the three coming months. 

Meanwhile, the economic activities in the Southern Governorates (Gaza Strip) experienced a notable drop compared to the previous month, resulting in lower overall index to around -48.6 points compared to -37.9 points in the previous October. This has resulted from the declines in all surveyed sectors, except the relative stability in the manufacturing index at about -6.0 points. The trade index has notably fallen (from -31.5 to -39.7 points), followed by drops in the indices of agriculture (from 2.0 to 1.0 points), IT and communication (from 0.4 to -0.3 points), transport and storage (from -0.9 to -1.4 points), construction (from -1.8 to -2.0 points) and finally the renewable energy (from 0.0 to -0.1 points).

Owners of surveyed firms in Gaza indicated a relative decline in the levels of production and sales during this month. Moreover, they expressed much lower optimism about near future, expecting decline in production and employment levels in the three coming months. 

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.