The PMA Business Cycle Index (PMABCI) – March
Notable decline in the West Bank and Gaza
The PMA has released the results of its Business Cycle Index (PMABCI) for March 2020, which revealed a notable decline in the overall index. This decline, which included both West Bank and Gaza, came amid the Palestinian government declared the state of emergency to fight coronavirus and to avoid its outbreak, and leading to the five months-lowest overall index at -16.5 points this month, compared to -9.8 in the previous month, and around 2.9 points in the corresponding month of 2019.
Looking at the WB’s index, it continued to slip within the negative territory, as it is the case since the beginning of this year. It remarkably declined to nearby -10.3 points in March compared to around -3.4 points in February as a result of falls in the indices of all surveyed economic, except the pickup in the industry index which rose from -1.0 to 2.5 points. This rise was due to higher performance of some manufacturing activities such as food, construction and engineering. However, the indices of remaining economic activities have declined headed by the trade index (from -3.3 to -10.5 points), and followed by the transport and storage index (from 0.4 to -1.3 points) and the agriculture index (from 0.9 to 0.0 points). In addition to lesser declines in the indices of the construction (from -0.4 to -0.7 points), the IT and communication (from 0.0 to -0.3 points) and finally the renewable energy (from 0.0 to -0.1 points).
In general, the surveyed firm owners in the West Bank indicated better production levels, but companied with lesser increase in sales, resulting in inventory accumulation. Moreover, firm owners expressed their fears and concerns about near future, registering high level of pessimism toward the production in the coming months.
Likewise, Gazan index significantly fell to its 13 months-lowest, registering -31.2 points compared to -24.8 points in last February due to the declines in all surveyed activities, except slight improvement in the transport and storage, and the IT and communication. Their indices rose from -1.2 to -0.5 points for the former, and from -0.4 to -0.3 for the latter. In the other side, the industry index remarkably dropped (from -2.2 to -5.3 points), followed by the agriculture index (from -1.5 to -3.4 points) and the trade index (from -18.2 to -20.0 points). The declines in the construction and the renewable energy proved to be slight, from -1.4 to -1.6 points, and from 0.0 to -0.1 points, respectively.
Gazan index has always registered negative values, reflecting the adverse long-lasting political and economic conditions in the Strip for more than 10 years now. During this month, the surveyed firm owners indicated relative stability in production and sales levels, however they expected significant falls in production and employment levels 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.