The extended PMA Business Cycle Index (extended PMABCI) – October 2019
Improvement in the West Bank and drop in Gaza Strip
The PMA has released the results of its extended Business Cycle Index (extended PMABCI) for October 2019. The results showed that the overall index has slightly declined against the backdrop of the fall in Gaza Strip, and despite the limited improvement in the West Bank. It declined to around -17.6 points in this October compared to -16.5 points in the previous month, and remained lower than its corresponding level of the last year (about -5.9 points).
Looking at the WB’s index, it picked up from about -13.5 points in last September to around -12.4 points this month due to main increase in the industry and the construction indices, along with lesser rises in indices of the renewable energy and IT. Both industry and construction indices grew by 1.0 point each, registering -5.8 for the former and 0.1 points for the latter. Meanwhile, IT and communication index increased (from -0.4 to 0.2 points) and renewable energy index rose marginally (from -0.1 to 0.0 points). Conversely, the trade index notably fell (from -5.8 to -6.9 points), followed by the agriculture index decline (from 0.0 to -0.5 points), while the storage and transport index maintained its previous level at 0.5 points.
In general, the surveyed firm owners indicated growth in production and sales, and decline in inventory during the previous period. However, they indicated lower expectations on future production and employment during the coming three months.
Meanwhile, Gazan index remarkably slipped from about -23.4 points in September to around -29.9 points in this October due to the decline in most sectors’ indices, except for IT index that relatively stabilized at -0.1 points. The agriculture index experienced the deepest decline (from -1.0 to -3.4 points), followed by industry index (-4.2 to -5.9 points) and the construction index (-0.5 to -1.8 points). Moreover, the storage and transport index fell (from 0.0 to -0.7 points), along with minor decline in indices of the trade and the renewable energy, settling at -18.0 points and -0.1 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. Moreover, this October experienced remarkably lower production, lesser sales and accumulated inventory, 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.