The extended PMA Business Cycle Index (extended PMABCI) – January 2019 As the new year begun, the overall index declined
The PMA has released the results of its extended Business Cycle Index (extended PMABCI) for January 2019. The results revealed that the index begun the new year with a drop due to the decline in the indices of both the West Bank (WB) and Gaza Strip (GS). Accordingly, the overall index at fell to -7.3 points in the first month of 2019 compared to -5.5 points and -3.1 points in the previous and corresponding months, respectively.
In the WB, the drop of the industry index (from 4.0 to 2.1 points), the agriculture index (from 2.2 to 1.3 points), along with a lesser fall in the transport and storage index (from 3.1 to 0.0 points) have resulted in a declined index of the WB from 4.5 points to around 2.0 points between December 2018 and January this year. On the opposite side, the trade index managed to pick up to -1.7 points compared to -2.6 points in the previous month. Meanwhile, the remaining sectors relatively stabilized at 0.3 points, 0.1 points and -0.1 points for the communication and IT, the renewable energy and the construction, respectively.
Overall, the fall in the West Bank's index reflected lower production and sales during January, as indicated by the economic firms' owners. However, owners expressed more optimistic expectations about production in the coming three months.
At the same time, Gazan sectoral indices have slightly changed, except for an increase in the industry and the construction, along with a bigger decline in the trade. This resulted in a slight overall drop by 0.3 point, registering -29.3 points this January. The trade index fell from -17.7 to -19.1 points, while the industry index increased (from -5.3 to -4.5 points) and the construction rose (from -1.8 to -1.6 points). Meanwhile, the remaining sector maintained their previous level: -3.4 points for the agriculture, -0.5 points for the transport and storage, -0.1 points for both the communication and IT, and the renewable energy.
It is worth noting that the Gazan index has always registered negative values since the PMA started calculating the extended indices (since two years), which reflect the adverse long-lasting political and economic conditions in the Strip. According to Gazan firms’ owners, production and sales declined during this month albeit at a lesser extent, while they expect the same level of production and employment in the coming three months.
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.