The Melnick State of the Economy Index Rose by 0.4 percent in October

Recovery in growth of the business sector

Economic activity will not be affected in the long term by the "Protective Edge” operation

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The Melnick State of the Economy Index rose by 0.4 percent in October 2014. The index reflects the quick recovery following the negative growth recorded during the “Protective Edge" military operation in Gaza.  Apparently the effects of the “Protective Edge" operation will have no long-term consequences regarding the activity in the business sector.  Industrial production recovered, probably as a result of the weakening of the shekel, and on the expected recovery of exports.  The revenue in trade and services increased, reflecting recovery of domestic demand, and in particular of private consumption.  Contrasted to that, the import index, which consists mainly of import of inputs for domestic production, continued to fall, so at this point, it is not expected that growth recovery will increase beyond the moderate rate of growth on the eve of the “Protective Edge" operation.  This assessment is reinforced by the continued decline in the number of employee posts in the business sector - that signifies weakness in the labor market.

The October Index components include: an increase of 1.3% in the index of industrial production in September, after rising by 4.1% in August; an increase of 2.6% revenue in trade and services in September, after rising by 2.1% in August; a decrease of 2.3% in the import index in October, after falling by 2.2% in September, and a decrease of 0.5% in the number of employee posts in the business sector in August, following a decline of 1.9% in July.

 

 To download the Index data visit the website at: http://themelnickindex.blogspot.com/

 

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