Wednesday, July 27, 2016

The Melnick State of the Economy Index decreased by 0.2 percent in June

Continued weakness in business sector growth
There are signs of decline in the rate of growth of private consumption
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The Melnick State of the Israeli Economy Index decreased by 0.2 percent in June 2016.  There is continued slackness of growth in the business sector. The growth of the Index in the first half of 2016 compared to the same period last year was 1.6 percent, but, compared to the second half of 2015 it was only 1.0 percent (at annual terms). This development signals a decline in the growth rate of the business sector. The industrial production index, which reflects the supply side of the business sector, fell again and is unable to break its stagnation. The revenue in commerce and services, reflecting domestic demand and mainly private consumption, fell again; this may imply a decline in the rate of growth of private consumption which, as we know, was a leading component of economic growth in recent times. Also, the imports index, which consists mainly of imports of inputs for domestic production, but also consumer goods, fell and pulled the whole Index down. The number of employee posts in the business sector increased, but the weakness of the economy is not yet evident in the labor market.


The June index components include: a decrease of 0.7% in the index of industrial production in May, after falling 1.7% in April; a 1.1% decline in revenue in commerce and services in May, after falling 0.3% in April; a decrease of 2.3% in the Imports Index in June, after rising 4.6% in May, and an increase of 0.6% in the number of employee posts in the business sector in April, following a decline of 0.4% in March.
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Wednesday, June 29, 2016

The Melnick State of the Economy Index Decreased by 0.1 percent in May

Once more there are signs of weakness in the growth of the business sector
Industrial production fails to break the deadlock
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The Melnick State of the Israeli Economy Index decreased by 0.1 percent in May 2016. The May Index indicates weak growth in the business sector. The industrial production index, which reflects the supply side of the business sector, that showed signs of moderate recovery in the previous month, fell again and it seems that it could not break the deadlock.  Much of industrial production is directed to exports that are adversely affected by weakness in global markets and the strong shekel. The revenue in commerce and services, reflecting mainly domestic demand and private consumption, fell slightly, but remains at high-level and consumer spending continues to support economic growth. The imports index, which consists mainly of imports of inputs for domestic production but also consumer goods, corrected the decline of the previous two months and maintains a stable level with strong fluctuations. The number of employee posts in the business sector dropped similarly to the rise in the previous month - the weakness of the economy is not yet evident in the labor market.


The May index components include: a decrease of 1.8% in the index of industrial production in April, after rising 3.4% in March; a decrease of 0.2% in revenue in commerce and services in April, after rising 1.6% in March; an increase of 5.7% in the imports index in May, after falling 0.2% in April, and a decrease of 0.3% in the number of employee posts in the business sector in March, after rising 0.4% in February.
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Wednesday, May 25, 2016

The Melnick State of the Economy Index increased by 0.1 percent in April


The business sector returned to moderate growth
The moderate recovery led by growth in industrial production
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The Melnick State of the Economy Index increased by 0.1 percent in April 2016. The April index marks a return to business sector growth at a moderate rate. The industrial production index, which reflects the supply side of the business sector, increased by 3 percent in March and led the moderate recovery in activity (this figure also improved the level of the index of February).  The revenue in commerce and services, reflecting domestic demand and mainly private consumption, rose. Domestic demand seems to continue to support economic growth. The imports Index, which consists mainly of imports of inputs for domestic production, but also consumer goods, declined and it may indicate a decline in growth later in the second quarter. The number of employee posts in the business sector rose moderately without offsetting the sharp decline of the previous month.


The April index components include: an increase of 3.0% in the index of industrial production in March, after rising 0.3% in February; An increase of 1.6% in revenue in commerce and services in March, following no change in February; A decrease of 1.3% in the Imports Index in April, after falling 4.6% in March and 0.1% increase in the number of employee posts in the business sector in February, after falling 0.8% in January. 
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