PMA Business Cycle Index (PMABCI) –October 2021 Shows declined in both West Bank and Gaza Strip


The results of the PMA Business Cycle Index (PMABCI) revealed a drop in the overall index, from -5.3 point in September to -10.1 point during October after the decrease in both West Bank and Gaza Strip, due to the expected slowdown in the economic activities, and the increase in the inflation rate that negatively affected the purchasing power of individuals.

As for West Bank, the overall index decreased from 7.1 points in September to 2.5 points in October.

This was headed by the drop in the agricultural index (from 7.2 to 2.2) and the trade index (from -2.1 to -5.0). As well as a decline in the construction index (from 0.3 to -0.3) and transport and storage index (from 1.1 to 0.5). However, the manufacturing index was the only exception, which increased (from 0.2 to 5.0). The remaining indices stayed relatively stable, at 0.1 points for the IT and communication index, and 0.0 points for the renewable energy index.

In general, surveyed firms in the West Bank pointed to an increase in production level compared to a decline in sales for the same period, which led to an increase in the accumulated inventory. In the meantime, the expected weak economic performance negatively affects their expectations for the near future for both; production and employment levels.

In Gaza Strip, the overall index dropped from -34.5 in September to -41.1 in October, due to the delayed reconstruction process and the weak purchasing power compared to the previous month. Hence, this downward trend was led by the fall in trade index (from -27.1 to -32.5), accompanied by the decrease in the agricultural index (from -3.5 to -5.0) and manufacturing index (from -1.7 to -2.4). However, the remaining indices stayed relatively stable around -0.1 to renewable energy index, -2.2 to construction index, and 0.1 to IT and communication index.

In the meanwhile, firms’ owners in Gaza Strip indicate that production and sales increased by the same level, which stabilize the accumulated inventory. As a result, their expectation for production in the next three months was negative, while the expectation for employment level was close to their previous level.

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