The Palestine Monetary Authority Business Cycle Indicator Partially Recovered in October after an All-Time Low in September
The Palestine Monetary Authority Business Cycle Indicator (PMABCI) amounted to -13.1 in Palestine in October: -15.8 in the West Bank and -1.8 in the Gaza Strip. These figures mark a noticeable improvement from -36.1 in Palestine, -21.3 in the West Bank, and -82.6 in the Gaza Strip a month earlier. As the figure below shows, the indicator reached an all-time low in September 2014 because of the devastating effects of the most recent Israeli war on Gaza. Another important feature demonstrated by the figure is the fact that the overall Palestinian PMABCI follows closely the West Bank indicator because West Bank enterprises constitute about 80% of the surveyed enterprises.
Figure: PMABCI in Palestine, the West Bank and the Gaza Strip, 11/2012-10/2014
Source: PMA
The PMABCI is a monthly index which captures the current state and recent trends in the Palestinian business environment, reflecting fluctuations in output and employment in the manufacturing sector. The indicator, based on a survey with a sample of 200 enterprises which are associates of the Palestinian Federation of Industries (PFI), was launched in November 2012.
The improvement in the performance of the index in the West Bank between September and October is attributed to developments in the textile, leather, paper, plastic, chemical, and pharmaceutical sub-sectors. Meanwhile, the wood, furniture, and food sub-sectors experienced a decline in the West Bank. The increase in economic activities was largely driven by high demand during Eid Al-Adha and high demand for pharmaceutical products during and after the Israeli war on Gaza, in addition to a decrease in the level of pessimism among business owners.
In the Gaza Strip, on the other hand, the impressive growth in the indicator (from -82.6 in September to -1.8 in October) resulted from resumption of activities in all industrial sub-sectors, especially food, construction, and metal industries. According to the data, in October the Gaza business owners demonstrated optimism with regards to production, employment, and output in the future.
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