The PMA Business Cycle Index (PMABCI) – February

The PMA has released the results of its Business Cycle Index (PMABCI) for February 2020. The results showed that the overall index dropped against the backdrop of similar falls in the West Bank and Gaza Strip indices. Accordingly, the overall index slipped to -9.8 points in this February compared to around -7.4 points in the previous month. It is also much lower than the value registered in the corresponding month of 2019 (-1.1 points).

Looking at the WB’s index, it continued to slip within the negative zone, declining to nearby -3.4 points in February compared to -1.4 points in January as a result of the falls in many economic activities indices, headed by the trade index (from -1.2 to -3.3 points), and followed by the agriculture index (from 2.2 to 0.9 points). In addition to lesser declines in the indices of the transport and storage (from 0.7 to 0.4 points) and the IT and communication (from 0.3 to 0.0 points). However, the industry index notably picked up (from -3.0 to -1.0 points), but was not accompanied with any significant increases in the remaining sectors’ indices as they relatively stabilized at 0.0 points and -0.4 points for the renewable energy and construction, respectively.

In general, the surveyed firm owners in the West Bank indicated remarkable fall in sales, and to lesser extent, in production. Moreover, they expressed less optimism about near future, particularly about the expected production in the coming three months.

Likewise, Gazan index fell from -21.5 points to around -24.8 points between January and February due to the trade index remarkable drop (from -14.6 to -18.2 points), along with other lesser declines in most economic activities. These decreases included the construction index (from -0.5 to -1.4 points), the agriculture index (from -1.0 to -1.5 points), the transport and storage index (from -0.7 to -1.2 points), and the lesser drop was in the IT and communication index (from -0.2 to -0.4 points). However, the industry index notably picked up (from �4.4 to -2.2 points), accompanied with relative stability in the renewable energy index at 0.0 points.

Gazan index has always registered negative values, reflecting the adverse long-lasting political and economic conditions in the Strip for more than 10 years now. This month was not an exception as the surveyed firm owners indicated lower production and sales, in addition to lower expectations on employment in the near future.

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 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.

Source: Palestine Monetary Authority