Wednesday, January 27, 2016

The Melnick State of the Economy Unchanged in December

Unusual upward correction to the level of the industrial production index
 The rise in revenue of commerce and services supports economic growth
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The Melnick State of the Economy did not change in December 2015. The stability of the Index, against the backdrop of a sharp correction in the index of industrial production, reveals improvement in the business sector. The industrial production index, which reflects the supply side of the business sector, rose abnormally by 7.2 percent. It seems that the boom does not reflect an actual dramatic change in manufacturing industries but a correction in the level of the series, as measured by the CBS. The revenue in commerce and services, reflecting the domestic demand, especially private consumption, continues to rise, and illustrates the rise in private consumption and its impact on economic growth. The imports index, which consists mainly of imports of inputs for domestic production, but also consumer goods, increased, and continues to develop with strong volatility. The number of employee posts in the business sector rose after several months of stability.

The December Index components include: an abnormal increase of 7.2% in industrial production index in November, after falling 2.3% in October; an increase of 0.7% of revenue in commerce and services in November, after rising 0.7% in October; an increase of 5.0% in the Imports Index in December, after falling 3.3% in November; and an increase of 0.4% in the number of employee posts in the business sector in October, after falling 0.2% in September.
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