The Melnick State of the Economy Index Unchanged in November

The effect of the second lockdown is more moderate than that of the first lockdown

Demand is the main factor in the decline in economic activity

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The Melnick State of the Israeli Economy Index did not change in November 2020. From the November and October indices data, we learn that the impact of the second lockdown on economic activity was more moderate than that of the first closure. The Industrial production index, which reflects the supply side of the business sector, decreased in October 2020, the second lockdown month, by 0.7%, compared to a decrease of 9.4% in March 2020, the first month of the first lockdown. The revenue in commerce and services, which reflects domestic demand and especially private consumption, decreased in October 2020, by 0.5% compared to a decrease of 13.4% in March 2020. The level of the industrial production index in October 2020 is like that of October 2019, however the revenue in commerce and services was lower in October 2020 by 6.1%, compared to the level in October 2019. The data indicate that the supply side of the business sector is less affected, and demand is the main cause of the recession in the economy.

 The components of the November Index include: a decrease of 0.7% in the industrial production index in October, after an increase of 2.6% in September; a decrease of 0.5% in revenue from commerce and services in October after a decrease of 2.8% in September; an increase of 4.0% in the import index in November, after a decrease of 1.5% in October and a 1.0% increase in the number of employee posts in the business sector in September, after an increase of 0.5% in August.

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