The Index indicates a further
decline in activity, although there is some slowdown in the decline.
According to a conservative
estimate, Israel's business GDP decline in 2020 stands at about 6.4 percent.
The Melnick State of the Israeli
Economy Index fell
by 1.1 percent in June 2020. Statistical difficulties, due to a break in the
data series, and problems in seasonal adjustments, continue to make it
difficult to provide an accurate monthly picture for the months of April, May
and June. According to our estimate, the sharp declines in the industrial production
index and in the revenue in commerce services in April were offset by increases
of a similar magnitude in May. Despite this, the level of the industrial production
and revenue in commerce and services in May is 7.1 and 13.7 percent lower,
respectively, compared to their levels in February. Imports of inputs to
domestic production, which is a key component of the imports index, rose
slightly in June, signaling a halt in the decline in economic activity. A
drastic drop was recorded in the number of employee posts in April which is a
month of an almost full economic lockdown.
According to a conservative calculation
that stabilizes economic activity by the end of 2020 at the level of June, the
annual decline in Israel's business product in 2020 can be estimated at about
6.4 percent, and per capita at about 8.0 percent. These estimates indicate that
the Israeli economy is in a deep recession.
Important Note on the Index Data for June:
Due to measurement difficulties, the CBS did not publish seasonally adjusted
data (for the months of March, April and May) for the Industrial Production
Index and for the revenue in the commerce and services of some sectors. 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.
Components of the June Index include: a
16.7% increase in the industrial production index in May, after a 17.7% decline
in April; a 15.9% increase in revenue in commerce and services in May after a
decrease of 16.0% in April; an increase of 1.3% in the import index in June,
after a decrease of 7.2% in May and a decrease of 27.6% in the number of
employee posts in the business sector in April, after a decrease of 3.4% in
March.
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