Wednesday, November 25, 2015

The Melnick State of the Economy Index Decreased by 0.1 Percent in October

Growth stagnation in the business sector
Significant weakness in industrial production

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The Melnick State of the Economy Index decreased by 0.1 percent in October 2015. The Index reflects stagnation in the business sector growth rate. The industrial production index, which reflects the business sector supply side, dropped to a level lower than the same month last year. The low level of industrial production reflects the difficulties in exports. The economy continues to be affected by the weakness of economic activity in Europe, the decline of growth in China, and probably by the strength of the shekel. The revenue in commerce and services, reflecting domestic demand, and mainly private consumption, dropped, but its high level continues to support the business sector; the figure still does not reflect the recent terrorist attacks. The imports index, which consists mainly of inputs for domestic production, but also consumer goods, rose at a similar rate to its decline in the previous month. And the number of employee posts in the business sector continues to decline, probably reflecting growing weakness in business sector employment.

The October index components include: a decrease of 3.3% in the index of industrial production in September, after rising 1.7% in August; a decrease of 0.7% of revenue in commerce and services in September, after rising 1.5% in August; an increase of 5.7% in the imports index in October, after falling 5.7% in September, and a decline of 0.2% in the number of employee posts in the business sector in August, after falling 0.9% in July.

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