The Melnick State of the Economy Index Rose by 0.5 Percent in September

The second lockdown will lead to a sharp decline in economic activity

It may be estimated that the decline in business output in 2020 will be 8.5% 

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The Melnick State of the Israeli Economy Index rose by 0.5 percent in September 2020. The rise in the Index reflects a slight recovery in the activity of the business sector in the summer months before the lockdown was announced at the end of September. Despite the recovery, the level of activity remained at a very low level. It turns out that the release of the lockdown alone is not enough to rehabilitate economic activity, if there is no solution to the presence of the pandemic. The second lockdown will lead to a sharp decline in economic activity. The initial effect of the second lockdown will be partially reflected in the October Index and the fuller effects in the November and December.

 Assuming the decline in the indices, by the end of the year, will be similar to that which occurred during the first lockdown, it may be estimated that the decline in business output, in 2020, will be 8.5%.

 The components of the September Index include: a 0.6% increase in the industrial production index in August, after a decrease of 3.3% in July; a 0.7% increase in revenue from commerce and services in August after a 1.4% increase in July; an increase of 5.4% in the import index in September, after an increase of 1.3% in August and an increase of 0.1% in the number of employee posts in the business sector in July, after an increase of 11.7% in June.

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