Pause of expansion
in the business sector
The business
sector did not grow in the first quarter of 2016
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The Melnick State of the Economy unchanged in
March 2016. The development of the index reflects pause of expansion in the
business sector. The level of activity in the business sector, derived from the
index, is similar to that of the last quarter of 2015, meaning the absence of
growth in the economy. The level of industrial production index in February
2016, reflecting the supply side of the business sector, is lower than in
February 2015. Industrial production is adversely affected by the development
of exports, due to the global market conditions and the appreciation of the
shekel. The revenue in commerce and services, reflecting mainly domestic demand
and private consumption, maintains a high level, but there are signs of lower
expansion in private consumption. The imports index, which consists mainly of inputs
for domestic production, but also consumer goods, also shows signs of
stabilization with strong monthly fluctuations. The number of employee posts in
the business sector declined but is still too early to determine weakness in
the labor market.
The March index components
include: an increase of 0.5% in the index of industrial production in February,
after falling 4.0% in January; a 0.6% decline of revenue in commerce and
services in February, after rising 0.6% in January; a decrease of 3.8% in the
imports index in March, after rising 9.8% in February, and a 1.1% decrease in
the number of employee posts in the business sector in January, after rising
0.3% in December.
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