The PMA Business Cycle Index (PMABCI) – February 2022

A drop in both West Bank and Gaza Strip

The results of the PMA Business Cycle Index (PMABCI) revealed a decrease in the overall index, from -5.7 point in January to -11.2 point in February, due to the significant drop in the West Bank, accompanied by a lesser decrease in Gaza Strip.

In the West Bank, the overall index declined from -0.6 point during January to -6.6 during February, after some sub-indices being affected by the increase of production cost, which in turn led to an increase in prices, according to the served firms, and consequently a decline in the purchasing power of the consumer. This drop was led by the decrease in the manufacturing index (from 0.7 to -5.8), in addition to a decline in the construction index (from 0.7 to -1.7) and the IT and communication index (from 1.0 to 0.6). In contrast, the agricultural index increased (from 0.4 to 3.6), accompanied by the rise in the renewable energy index after a long period of stabilization (from 0.0 to 0.7). In the meanwhile, the trade index stabilized around -4.5 point, and the transportation and storage index stayed around 0.6 point.

As for Gaza Strip, the overall index has declined from -31.9 point in January to -34.7 point in February, as a result of the decline in some sub-indices. The only exception was the construction index, which increased (from -10.1 to -7.2) due to the removing the rubble of May's war. However, the drop of Gaza index was led by the decrease in the agricultural index (from 2.4 to -1.2), followed by the transportation and storage index (from -0.8 to -1.9), and the manufacturing index (from -4.3 to -5.3). Hence, the remaining indices remained relatively stable around -15.6 point for the trade index, -1.9 point for the IT and communication index, and finally -3.2 point for the renewable energy index. 

In general, the surveyed firms in West Bank and Gaza Strip pointed to an uneven drop in production and sales levels, which resulted in an increase in inventory level. However, their expectations for production level in the next three months were positive, while the expected employment level in the near future diverged, between an increase in the West Bank and a stabilization in Gaza Strip.