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

Click graph to enlarge

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.

Click table to enlarge

Click graph to enlarge