The extended PMA Business Cycle Index (extended PMABCI) – November 2019
Improvement in the overall index
The PMA has released the results of its extended Business Cycle Index (extended PMABCI) for November 2019. The results showed that the overall index has slightly increased against the backdrop of the rise in the West Bank’s index, and at a lesser degree in Gaza Strip’s index. The overall index registered around -14.5 points in this November compared to -17.6 points in the previous month, but remained lower than its corresponding level of the last year (about -5.9 points).
Looking at the WB’s index, it modestly picked up from about -12.4 points in last October to around -10.4 points this month due to main increases in the trade and the industry indices, despite the decline in the other indices at varying degrees. The trade index remarkably rose from -6.9 to -3.0 points, followed by the industry index from -5.8 to -5.3 points. Conversely, the agriculture index decline notably from -0.5 to -1.8 points, followed by the construction index (from 0.1 to -0.5 points) and the storage and transport index (from 0.5 to 0.2 points). At the same time, IT and renewable energy indices relatively stabilized at 0.1 point and 0.0 point, respectively.
In general, the surveyed firm owners indicated growth in production during the previous period but was not accompanied with rise in sales, which led to inventory accumulation. Moreover, they were less optimistic about future production during the coming three months.
Meanwhile, Gazan index slightly rose by only 1 point reaching -28.9 points in this November as a result of mixed performance of activities’ indices. The increases were registered in the agriculture index (from -3.4 to -2.0 points) and the industry index (from -5.9 to -4.9 points). However, the declines were in the indices of the trade (from -18.0 to -19.1 points), the construction (from -1.8 to -1.9 points) and the storage and transport (from -0.7 to -0.9 points). At the same time, indices of the renewable energy and IT relatively stabilized at 0.0 point for the former and -0.1 points for the latter.
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. Only the production registered some improvement, but the sales declined and the inventory accumulated, in addition to worse 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.