The PMA Business Cycle Index (PMABCI) – January
The index stabilized as the year begins
The PMA has released the results of its Business Cycle Index (PMABCI) for January 2020. The results showed that the overall index maintained its previous level as a result of varying performance; pick up in Gaza Strip’s index and decline in the West Bank’s. Accordingly, the overall index stabilized at -7.4 points for the second month in a row, approaching its corresponding level of 2019 (around -7.3 points).
Looking at the WB’s index, it slightly slipped to the negative zone this month (-1.4 points) compared to nearby 1.8 points in December 2019. This comes due to notable drop in the trade index (from 3.3 to -1.2 points), along with lesser decreases in the agriculture index (from 2.7 to 2.2 points) and the renewable energy index (from 0.1 to 0.0 points). Conversely, increases registered in the industry index (from -4.1 to -3.0 points) and the construction index (from -7.0 to -4.0 points); in addition to minor rises in the communication index and the storage and transport index by 0.2 points each, scoring 0.3 points for the former and 0.7 points for the latter.
In general, the surveyed firm owners indicated remarkable fall in sales, and to lesser extent, in production. However, they expressed their optimism about near future, particularly about the expected production in the coming three months.
Meanwhile, Gazan index managed to pick up from -29.1 points in last December, reaching its highest in nearly 5 months at -21.5 points this month. This mainly achieved thanks to the strong improvement of the trade index (from -19.5 to -14.6 points) followed by lesser contributions to the construction index (from -1.9 to -0.5 points), the agriculture index (from -2.5 to -1.0 points) and the transport and storage index (from -1.2 to -0.7 points). However, the industry index declined (from -3.9 to -4.4 points) along with non-significant falls in the renewable energy and the communication indices, scoring -0.1 points and -0.2 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 surveyed firm owners indicated better production and sales, but maintained their cautious 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, sales 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.