The PMA Business Cycle Index:Improvement in the West Bank compared to a contraction in Gaza strip

Ramallah/PNN/

The results of the PMA Business Cycle Index (PMABCI) revealed a slight recovery during June, recording -14.9 point compared to -17.7 points in May, which was driven by a notable improvement in West Bank that exceeded the deterioration in the Gaza strip index because of the war at the end of May.

In West Bank, the index rises from -4.1 point in May to 5.3 points during June, the best-recorded level in the last couple of years, affected by the reliving in the containment measurement as well as vaccination a relatively significant number of people. This upward trend had covered most of the sup-indices, excluding the construction index that decreased (from -0.5 to -1.0). The trade index managed to register the biggest increase among all indices (from -4.9 to 0.3) due to the increased market activity.

The transport and storage index rise (from -0.8 to 1.2) after freeing the movement and lifting restrictions especially on public transportation, and the rise in the manufacturing index (from -1.0 to 1.0) which might refer to the boycott campaign of the Israeli products. In addition, there was a marginal pick-up in the agricultural index (from 3.1 to 3.6), and the IT and communication index (from 0.0 to 0.2). In the meantime, the renewable energy index stayed relatively stable at around 0.0 points.

In general, according to the respondent firms in West Bank, there was an increase in production levels accompanied by a faster pace in sales levels, which led to a decrease in inventory. In light of that, firms expressed optimistic expectations in the next three months for the employment and production levels.

On the other side, the specter of the war on the Gaza strip is still dominant, leaving the general index for Gaza at its worst level ever at around -62.5 point. However, due to the lack of actual data in the previous month, the comparison was done compared to April (the latest available actual data).

Accordingly, there was a contraction in every single sup-indices, headed by the trade index (from -12.0 to -40.6), the agricultural index (from 4.4 to -5.4), and the manufacturing index (from -2.6 to -11.4). In addition, there was a lesser drop in transport and storage index (from -0.5 to -1.9), followed by the decline in the construction index (from -1.8 to -2.6), the IT and communication index (from -0.2 to -0.5), and finally, the renewable energy index with a marginal decrease (from 0.0 to -0.1).

In the meantime, the respondent firms in the Gaza strip pointed to an exceptional fall in production and sales levels after the damages in markets and buildings due to the Israeli airstrikes and bombing on Gaza in wartime. However, the cut in production exceeded the drop in sales, which caused a small reduction in inventory. In the meanwhile, expectations for employment and production levels in the near future were negative, reflecting the uncertainty of the coming period.

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