Results of June PMABCI

A decrease in both the WB and GS

The PMA has launched on 30/6/2013 the results of June PMABCI. At the national level, the overall PMABCI indicates a high drop took place in June  2013, from 3.81 in May 2013 to -7.71.

The behavior of the index has been different in the West Bank (WB) and Gaza Strip (GS). In WB, a high drop took place from  1.93 in May 2013 to -11.99 in June. This drop came after the continuous improvement in the index during the last four months, which, in turn, indicates a further decrease in the WB expectation about the economic performance in the short run. Several reasons may stand behind this drop, among those are: the continuous political instability, and the resigning of Dr. Fayyad government.

In Gaza Strip also, there was a  slight drop during the last month, although it still remains on a positive 0.85. keeping its economic performance close to levels attained since December 2012. In general, GS still suffers from various internal and external factors (Israeli siege, political uncertainty under and the internal division) that significantly affect the economic performance negatively, and limited the expectations about any economic improvement in the short run.

In general, the overall index indicates that the recovery in the economic activity that took place during the past months of 2013 was interrupted in June, as a result of contraction in some industrial sectors such as; food (index decreased from 1.53 to -1.53), furniture (from 5.76 to -1.65), paper (from 0.53 to -0.21), engineering (from -3.89 to -5.13), construction and stones and marble (from 0.82 to -1.7).

Source: PMA (2013). PMABCI, June 2013.

About PMABC

The PMABCI is a monthly index which aims to capture the state and evolution of the Palestinian business environment, reflecting fluctuations in production and economic activity over time. The index also provides real-time information about the economy, and thus helps in taking the appropriate decisions without having to wait for the release of actual data that need time for publication.

The construction of the index follows international standards and is based on qualitative data obtained from monthly business surveys, all belonging to the manufacturing sector, were selected via stratified random sampling. The respondents are asked a number of qualitative questions related to production, sales, inventories, and near-term expectations about production and employment. The answers are then weighted according to each industry's share in total employment in the manufacturing sector, yielding a single value ranging from -100 (poor performance) to +100 (the highest score, indicating solid business performance and positive prospects). More than its absolute values, the evolution of the index over time is what intends to reflect the cycle of the business activity.