The decline of the index in
April is unprecedented in the Israeli economy.
In March, a long business
cycle denoted "Prolonged Output Growth"
came to an end
came to an end
The Melnick State of the Israeli
Economy fell by 0.5 percent in April
2020. The April index marks the first sign of the economic impact of the Corona
virus in the Israeli economy. A fuller impact will be capture in the May Index.
According to our estimation, in the month of March, the seasonally adjusted industrial
production index fell by 4.0 percent and the revenue in commerce and services
index fell by 9.7 percent (see note below). Identifying business cycles in
Israel according to the Melnick Index indicates that in March, a long cycle denoted
as "prolonged output growth," was halted. This cycle began in June
2010 after the Great Financial Crisis (see Figure 1 attached). The new cycle
beginning in March 2020 is undoubtedly a cycle of recession caused by the
Corona pandemic.
Important Note on the Index Data for
April: Due
to measurement difficulties, the CBS did not publish seasonally adjusted data (for
march) of the industrial production index and the revenue in commerce and
services. The data we use for the above indicators are calculated on the basis
of the original series, without seasonal adjustment, and seasonal factors of the
last three years; hence, these data may change when the CBS publishes official
data.
The April Melnick Index components include:
a 4.0% decline in the industrial production index in March, following a 0.2%
rise in February; a 9.7% decline in the revenue of commerce and services in
March after a 1.5% decline in February; an increase of 2.3% in the import index
in April, after a 0.7% drop in March and an increase of 0.1% in the number of employee posts in the
business sector in February, after a 1.2% decline in January.
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