The extended PMA Business Cycle Index (extended PMABCI) – December 2019
Ending the year with a better performance
The PMA has released the results of its extended Business Cycle Index (extended PMABCI) for December 2019. The results showed that the overall index has remarkably increased against the backdrop of the rise in the West Bank’s index, despite the relative stability in Gaza Strip’s index. The overall index picked up to around -5.9 points in this December compared to -14.5 points in the previous month, almost approaching the corresponding level of 2018 (around -5.8 points).
Looking at the WB’s index, it notably jumped from about -10.4 points in last November to register a positive value (1.8 points) this month due to main increases in the trade and the agriculture indices. The trade index significantly rose from -3.0 to 3.3 points, followed by the agriculture index from -1.8 to 2.7 points. Moreover, the industry index rose (from -5.3 to -4.1 points) and the transport and storage index increased (from 0.2 to 0.5 points). However, the changes in the three remaining sectors were minor, and the indices of construction, renewable energy and communication relatively stabilized at -0.7 points, 0.1 points and 0.0 points, respectively.
In general, the surveyed firm owners indicated significant growth in production during the previous three months, and lesser growth in sales. They also were more optimistic about future production and employment in the near future.
Meanwhile, Gazan index relatively stabilized during December, registering -29.1 points as a result of mixed performance of activities’ indices. The industry index grew (from -4.9 to -3.9 points) while both the agriculture and trade declined by almost the same amount, from -2.0 to -2.5 points for the former, and from -19.1 to -19.5 for the latter. However, other declines were lesser, as storage and transport index fell from -0.9 to -1.2 points, and the communication index decreased from -0.1 to -0.2 points. Meanwhile, both renewable energy and construction have maintained their previous values at 0.0 points and -1.9 points, respectively.
It is worth noting that the Gazan index has always registered negative values since the PMA started calculating the extended indices (since January 2017), which reflect the adverse long-lasting political and economic conditions in the Strip. This month was not an exception; however, the declines were lesser as indicated by the firm owners, particularly for the production and the future expectations on production and employment in the near future.
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 and employment levels). The maximum value of the index 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.