The PMA Business Cycle Index (PMABCI) – May 2022

A drop in the West Bank vs improvement in Gaza Strip

The results of the PMA Business Cycle Index (PMABCI) revealed a decrease in the overall index, from 11.8 point in April to 1.7 point in May. This decline refers to the higher comparison basis in the previous month, mainly due to the religious festival and Ramadan.

The overall index in West Bank declined from 17.7 point in April to 4.1 point in May, affected by the decrease in most of the sup-indices. This decline was driven by both of agricultural index (from 4.0 to -0.9), and the manufacturing index (from 6.1 to 1.6), followed by the drop in the transportation and storage index (from 2.3 to 0.6). In addition to the decrease in the construction index (from 4.3 to 2.9), and finally IT and communication index (from 1.1 to 0.5). While, the remaining sup-indices relatively stabilized with a negative trend, recording -1.3 point for the trade index, and 0.7 point for the renewable energy index.

In general, firms’ owners in the West Bank pointed to a decline in production level, accompanied by a bigger decrease in sales level, which caused accumulating inventory. In addition to negative expectations about production and employment levels in the near future.

On the other side, the overall index in Gaza Strip witnessed an increase from -18.6 point in April to -10.4 point in May. This improvement was headed by the rise in the agricultural index (from -3.6 to 1.2), followed by the manufacturing index (from -3.2 to 0.4), and the transportation and storage index (from 0.0 to 1.5). However, there was a drop in the renewable energy index (from 1.1 to 0.0), in addition to the construction index (-9.1 to -9.8). In the meantime, trade index stabilized at around -3.3 point, and the IT and communication index at around -0.3 point. 

Moreover, firms’ owners in Gaza Strip indicated to a rise in production level, alongside a lesser increase in sales level, which led to an increase in inventory. However, their expectation for production level in the next three months was negative, while they expected an increase in employment level in the near future.