Continued
weakness in business sector growth
There are
signs of decline in the rate of growth of private consumption
The Melnick State of the Israeli Economy
Index decreased by 0.2 percent in June
2016. There is continued slackness of growth
in the business sector. The growth of the Index in the first half of 2016
compared to the same period last year was 1.6 percent, but, compared to the
second half of 2015 it was only 1.0 percent (at annual terms). This development
signals a decline in the growth rate of the business sector. The industrial
production index, which reflects the supply side of the business sector, fell
again and is unable to break its stagnation. The revenue in commerce and services,
reflecting domestic demand and mainly private consumption, fell again; this may
imply a decline in the rate of growth of private consumption which, as we know,
was a leading component of economic growth in recent times. Also, the imports
index, which consists mainly of imports of inputs for domestic production, but
also consumer goods, fell and pulled the whole Index down. The number of
employee posts in the business sector increased, but the weakness of the
economy is not yet evident in the labor market.
The June index components include: a decrease
of 0.7% in the index of industrial production in May, after falling 1.7% in
April; a 1.1% decline in revenue in commerce and services in May, after falling
0.3% in April; a decrease of 2.3% in the Imports Index in June, after rising
4.6% in May, and an increase of 0.6% in the number of employee posts in the
business sector in April, following a decline of 0.4% in March.
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