There are
signs of a pause in the expansion of the business sector.
Revenues in
the commerce and services continue to support economic growth.
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The Melnick State of the Economy did not change in February 2016. The Index displays
signs of a halt in the expansion of economic activity in the business sector,
after its moderate expansion of recent months. The industrial production index,
which reflects the supply side of the business sector, fell in two consecutive months
after the unusual upward correction of its level in November. Apparently, industrial production continues to
be negatively affected by the development of industrial exports due to negative
global market conditions, particularly in Europe and China. The revenue in
commerce and services, reflecting mainly domestic demand and private
consumption, remained at a high level and its impact on the Index illustrates
the effect of the increase in private consumer spending on economic growth. The
imports index, which consists mainly of imports of inputs for domestic
production, but also consumer goods, continues to show strong volatility with
an upward positive trend. The number of employee posts in the business sector
rose, reflecting strength in the labor market.
The February Index components include: a
decrease of 3.7% in the index of industrial production in January, after
falling 1.2% in December; an increase of 0.9% in revenue in commerce and services
in January, after falling 1.1% in December; an increase of 9.5% in the imports index
in February, after falling 6.3% in January, and an increase of 0.2% in the
number of employee posts in the business sector in December, after rising 0.5%
in November.
* The weighs of
the index components were updated in 2016. The main changes are the decline in
the weight of industrial production and the rise in the weight of revenue in
the commerce and services.
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