The Composite State of the Economy Index for December 2019 increased by 0.3 percent: Activity in 2019 expanded at the long-term rate similar to 2018
The Bank of Israel's Composite State of the Economy Index for December increased by 0.26 percent. The Index’s rate of increase continues to reflect stable growth at the long-term pace.
The Index was positively affected by a sharp increase in consumer goods imports and by an increase in the job vacancy rate for December, and by an increase in the retail trade revenue index. The sharp increase in consumer goods imports reflects, at least partly, the bringing forward of vehicle purchases into December, in view of the taxation change in the beginning of 2020. The Index’s growth rate was moderated primarily by declines in the import of inputs and in goods exports in December, as well as the declines in the industrial production index and in the services revenue index for November. There were essentially no revisions to the overall Index for previous months (Table 1). Table 2 presents the development of components of the Index in the past few months.
For 2019 overall, the Composite Index increased by 3.4 percent relative to 2018, a similar pace to that of GDP based on initial estimates from the Central Bureau of Statistics (3.3 percent overall, 3.5 percent in the business sector) and similar to the growth rate of the Composite Index in the previous year (3.6 percent). The growth rate of the Composite Index over the past two years reflects the economy’s long term growth rate, which is consistent with the low unemployment rate. The development of the Index’s components is in line with this picture: the growth rate of employee posts was 1.8 percent, similar to the previous year and only slightly higher than the growth rate of the population in the prime working ages. The increase of the Composite Index this year reflected balanced growth, seen in increases in the domestic retail trade and services revenue indices as well as in the industrial production index and in exports.
Table 1: Revisions in the Composite Index
|
Revision |
Previous data |
New data |
|
December |
|
0.26 |
|
November |
0.24 |
0.24 |
|
October |
0.28 |
0.29 |
|
September |
0.27 |
0.27 |
Table 2: Changes in the Index components in recent months
(monthly percent change, unless otherwise noted)
|
|
December |
November |
October |
September |
|
Industrial Production Index (excluding mining and quarrying) |
|
-0.9 |
2.5 |
0.8 |
|
Services Revenue Index (excluding education and public administration) |
|
-1.1 |
1.0 |
1.1 |
|
Retail Trade Revenue Index |
|
0.3 |
0.3 |
4.7 |
|
Imports of consumer goods1 |
20.1 |
-9.2 |
12.5 |
9.8 |
|
Imports of manufacturing inputs (excluding fuels) |
-6.7 |
-0.6 |
3.4 |
3.7 |
|
Goods exports (excluding agriculture) 1 |
-4.3 |
-1.2 |
4.9 |
-5.5 |
|
Services exports (excluding transportation) 2 |
|
|
4.0 |
-0.3 |
|
Number of employee posts in the private sector |
|
|
0.1 |
0.1 |
|
Job vacancy rate in the business sector3 |
3.5 |
3.4 |
3.4 |
3.4 |
|
Building starts4 |
|
|
|
-1.8 |
1 Goods imports and exports are calculated in fixed prices (adjusted for changes in foreign trade price indices).
2 Services exports are calculated in real terms (using the Consumer Price Index).
3 The job vacancy rate is calculated out of the total number of employed people and vacancies and is included in the index at its seasonally adjusted level.
4 Since the Central Bureau of Statistics publishes data on building starts once per quarter, the data integrated into the model are at a monthly frequency based on additional sources, such that the distribution is consistent with the quarterly data published by the Central Bureau of Statistics (in percent, seasonally adjusted).
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http://www.boi.org.il/en/Research/Pages/ind.aspx