The results of the PMA Business Cycle Index (PMABCI) revealed a drop for the third month in a row in the overall index, from -10.1 point in October to -14.7 point during November. This is due to the rise of prices of goods and services during this month, and the deterioration of individuals' purchasing power, especially for those who are receiving their wages and salaries in other currencies rather than the shekel. In addition to the government statement about the fragile fiscal stance, which may lead to some cuts in public employees' salaries.
As for West Bank, the overall index decreased from 2.5 point in October to -1.3 point in November. In more detail, the manufacturing index decreased (from 5.0 point to 1.1 point), followed by the trade index (from -5.0 to -7.5) and the transport and storage index (from 0.5 to -0.7). While the agricultural index was the only exception, where it increased (from 2.2 to 5.8). Other indices remain relatively stable, renewable energy index, and IT and communication at around 0.0 point, while construction index stabilized at around -0.1 point.
In general, surveyed firms in West Bank pointed out an increase in production level, despite the decline in sales for the same period. In the meantime, their expectation in the near future was negative for production and employment levels, due to the shortage of skilled labors in some sectors, due to their transition from the local market to the Israeli labor market, according to the firms.
In Gaza Strip, the overall index dropped from -41.1 point in October to -47.5 point in November. Where manufacturing index declined (from -2.4 point to -5.0 point) because of the war in May, which led to the shutdown of some factories, or not reaching pre-war production levels in others. Transport and storage index decrease (from 0.9 to -0.5) due to end of government transportation program[1], the drop in trade index (from -32.5 to -33.6), and finally the fall in the agricultural index (from -5.0 to -5.9). However, the remaining indices stayed relatively stable around -0.1 point to renewable energy index, -2.1 point to construction index, and -0.4 point to IT and communication index.
In general, firms' owners in Gaza Strip indicated that there was an uneven decrease in production and sales levels. While their expectations for the next three months remained negative for production and employment.
PMA Business Cycle Index (point)*
Source: PMA (2021). PMABCI, November 2021.
* The maximum value is +100 (favorable economic performance), while the minimum is -100 (bad economic performance).
** Estimated value for Gaza Strip.
[1] An agreement between the government in Gaza and private transportation companies, where the private company transport public worker, in return the government will pay them on behalf of the workers, this program has stopped during the recent month.
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Palestine Monetary Authority published this content on 01 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 December 2021 11:00:06 UTC.
