The Monthly PMA Business Cycle Index PMABCI November 2017

Slight improvement in the overall index

The PMA has released the results of its Business Cycle Index (PMABCI) for November 2017. The results revealed a slight improvement in the overall index after three consecutive months of deterioration. The PMABCI picked up from -7.6 points in October to -5.8 points this month, owing to the increase in the West Bank's index, along with relative stability in the index of Gaza Strip. However, it remained below the corresponding month in 2016, when it stood at 1.1 points.

In the WB, most industrial sub-sectors' indices increased, leading to a relative pick up in the WB's index from 3.2 points to 6.6 points. The Furniture index improved notably from 0.9 to 3.4 points, followed by slight increases in the sub-sectors' indices of: chemical and pharmaceutical industries, paper, food, leather and plastics. Nonetheless, the indices of textile, construction industries, traditional industries and engineering industries improved mildly by less than 1.0 points each. 

The improvement in the WB's index resulted from slight increases in production and sales levels during November, as indicated by industrial firms' owners. At the same time, production future expectations have also picked up. 

However, in GS, the index showed relative stability, increasing by only 0.9 points to reach -36.0 points. This came as most sub-sectors' indices maintained their previous levels, except for a moderate improvement in the engineering industries' index, and a slower one in the plastics index. Moreover, production and sales stabilized compared to the previous month, as indicated by industrial firms' owners

It is worth noting that the Gazan index remained stuck in the negative zone for more than four years now, which reflected the adverse political and economic conditions in the Strip, the continued Israeli siege, the near-complete closure of the Rafah border crossing, and the prolonged delays in the reconstruction efforts. It is also important to mention that the expected positive impact of the Cairo reconciliation agreement on the Gazan index did not materialize this month, as future expectations remained lackluster.

It is noteworthy that the PMABCI is a monthly index, which aims to capture the state and evolution of economic activity in Palestine by tracking the performance of the industrial sector, especially fluctuations in production and employment levels and their implications for the economy at large. The maximum value of the PMABCI 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.

Categories: PMA