Wednesday, September 27, 2017

The Melnick State of the Economy Index Increased by 0.1 Percent in August

Small expansion in the business sector is seen
Private consumption continues to lead at a more moderate rate

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The Melnick State of the Israeli Economy Index increased by 0.1 percent in August 2017. The business sector continued to expand at a moderate rate, against the background of its weak growth in the last few months. The revenue in commerce and services, which reflects domestic demand and mainly private consumption, indicates a renewal of growth after six months of relative stability. It appears that the private consumption that has led the economic growth of recent years continues to lead, albeit at a more moderate rate. The industrial production index, which reflects the supply side of the business sector, finds it difficult to return to growth despite the apparent improvement in world markets. It appears that the strength of the shekel continues to have a negative impact on industrial production development through the effect of the shekel on exports of the industrial sector. The imports index, which mainly includes imports of inputs for domestic production, continues to expand at a consistent pace with the economy's moderate growth. The number of employee positions in the business sector declined in the last two months, however, the level of jobs still reflects a stronger labor market.

The August Index components include: a 2.2% drop in the industrial production index in July, following an increase of 1.4% in June; an increase of 0.5% in commerce and services revenue in July, following an increase of 1.5% in June; an increase of 0.2% in the imports index in August, after an increase of 0.7% in July, and a decrease of 0.1% in the number of employee posts in the business sector in June, following a decrease of 0.1% in May.

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