The PMA Business Cycle Index (PMABCI) – October 2020

Press release

The PMA Business Cycle Index (PMABCI) – October 2020

Improvement in the West Bank and Gaza Strip

The results of PMA Business Cycle Index (PMABCI) revealed that the overall index has picked up during October, registering -29.8 points compared to around -40.3 points in the previous month due to the significant increase in Gaza Strip’s index, accompanied with a relative rise in the West Bank’s index. However, the overall index is still below both the pre-coronavirus crisis levels and the corresponding level of the last year.

In the Northern Governorates (West Bank), the index picked up to-26.4 points compared to -31.4 points in last September. This was resulted as all sectoral indices have improved, except for the decline in the agriculture index from 0.0 to -3.6 points. These rises were headed by the growth in the trade index (from -19.8 to -13.4 points), followed by lesser improvements in the indices of the transport and storage (from -1.8 to -0.8 points), the manufacturing (from -7.6 to -6.6 points) and IT and communication (from -0.4 to -0.3 points). Meanwhile, the indices of construction and renewable energy have both barely grown, registering -1.6 points for the former and -0.1 points for the latter. 

In general, the surveyed firm owners in the Northern Governorates indicated an improvement in production and sales levels during October. At the same time, they expressed some optimism about the near future, expecting higher production in the three coming months. 

Meanwhile, the economic activities in the Southern Governorates (Gaza Strip) experienced a notable improvement compared to the previous month, which witnessed a series of economic closure and tightening the containment measures in the wake of increasing coronavirus cases. Accordingly, the overall index managed to pick up to its highest in five months at about -37.9 points this October, compared to -61.5 points in the previous month as a result of the increases in all sectoral indices. The trade activity has regained its momentum, registering an index of -31.5 points compared to -47.9 points in last September. This was followed by lesser increases in the indices of manufacturing (from -8.8 to -6.1 points), agriculture (from -0.5 to 2.0 points), IT and communication (from -0.5 to 0.4 points), transport and storage (from -1.6 to -0.9 points) and construction (from -2.0 to -1.8 points). Finally, the renewable energy index has slightly risen by only 0.1 points, scoring an index of 0.0 points.

Owners of surveyed firms in Gaza indicated remarkable improvement in the levels of production and sales during this month. Moreover, they expressed high optimism about near future in terms of production and employment. 

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 overall index is simply the sum of all sectoral indices. Its maximum 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.

PMA Business Cycle Index