Wednesday, February 26, 2020

The Melnick State of the Economy Index Rose 0.2 percent in January

Business sector growth continues
Private consumption appears to be rising
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The Melnick State of the Israeli Economy Index rose 0.2 percent in January 2020. In 2019, the Index grew by 3%. (This month's index does not reflect the possible economic effects of the Corona virus.) Business sector growth continues. Revenue from commerce and services, reflecting domestic demand and especially private consumption, rose sharply in the last month, correcting the decline in the previous month, and indicating a rise in private consumption. The industrial production index, which reflects the supply side of the business sector, somewhat corrected the previous month's decline, and its high level is maintained despite slowing activity in Europe and the strengthening of the shekel. The import index, which mainly reflects imports of inputs for domestic production, is characterized by volatility around a high level that does not raise any concern for realizing the potential of the business sector expansion. The number of employee posts in the business sector corrected, partially, the sharp decline of the previous month, and it cannot be said that there is a weakness in the labor market.

The January Melnick Index components include: a 0.1% rise in the industrial production index in December, after a 1.7% decline in November; a 3.0% increase in the revenue of commerce and services in December, after a 0.7% decrease in November; a 1.1% decline in the import index in January, following a 0.5% rise in December; and a 0.9% increase in the number of employee posts in the business sector in November, following a 2.2% drop in October.
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