The extended PMA Business Cycle Index (extended PMABCI) – November 2018

Improvement in the West Bank (WB) and decline in Gaza Strip (GS)

The PMA has released the results of its extended Business Cycle Index (extended PMABCI) for November 2018. The results revealed that the West Bank’s index has improved, accompanied with a decline in Gaza Strip, resulting in a relatively stabilized overall index at around -5.9 points. However, it remained slightly higher than the index of November 2017 (-10.0 points)

In the WB, the growth of the trade index (from -2.3 to 0.1 points), along with the improvement in the industrial index (from 1.0 to 1.4 points) have managed to lift the overall index up from 3.8 points in the previous month to around 5.3 points this November. However, the remaining sectors experienced declines, particularly the transport and storage index (from 0.9 to 0.2 points) and the agriculture index (from 3.6 to 3.1 points). Meanwhile, the falls in indices of the renewable energy, the IT and telecommunications, and the construction were minor.

Overall, the increase in the West Bank's index reflected higher sales during November that resulted in lower inventory levels, as indicated by the economic firms' owners. However, owners expressed less optimistic expectations about production in the coming three months.

Conversely, GS index resumed declining after two consecutive months of gradual improvement, sliding to -32.3 points compared to -28.7 points in last October. This resulted as all sectors fell, except of an improvement in the industrial index (from -6.1 to -4.9 points). The agriculture sector scored the main decline as its index dropped from -2.0 to -4.4 points, followed by another decrease in the trade index (from -18.4 to -19.7 points). The fall in the remaining sectors were slight and by less than 0.5 points for each; construction, transport and storage, and IT and telecommunications which achieved -1.7 points, -1.4 points and -0.2 points, respectively. Meanwhile, the renewable energy index stabilized at the previous value of 0.0 points.

It is worth noting that the Gazan index has always registered negative values since the PMA started calculating the extended indices (since two years). These negative values reflect the adverse long-lasting political and economic conditions in the Strip, the continued Israeli siege, and the prolonged delays in reconstruction efforts, and the weak demand. Moreover, production and sales during this month declined as indicated by Gazan firms' owners. The same is for the future expectations about employment in the coming three months, where the level of pessimism remained high.

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 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.


Categories: PMA, Statistics