The Bank of Israel's Composite State of the Economy Index for March declined by 0.06 percent following years of quite stable increases. The last decline in the index was recorded 8 years ago, during the European debt crisis, when there was a decline in just one month. Prior to that, there were declines in the index during the Global Financial Crisis in 2008. The corona crisis worsened sharply in March, and from the middle of the month, a significant portion of economic activity was curtailed. As a result, there were sharp declines in goods exports and in the job vacancy rate, and a decline in the import of consumer goods in March. There was also a drop in services revenue in February. These led to a decline in the Composite Index. The Industrial Production index increased in February, which moderated the decline in the Composite Index for March, but various indicators such as the Business Tendency Survey and the Purchasing Managers index indicate a decline in the Industrial Production index for March. When the Central Bureau of Statistics publishes quantitative data on certain components of the index at a lag, other indicators are used to assess the change in those components.
The Composite Index for February was revised downward due to the accumulation of new data for February and March that indicate the intensity of the decline in total economic activity (Table 1). Table 2 presents the development of components of the Index in the past few months.
Table 1: Revisions in the Composite Index
|
Revision |
Previous data |
New data |
|
March 2020 |
|
-0.06 |
|
February 2020 |
0.26 |
0.07 |
|
January 2020 |
0.26 |
0.24 |
|
December 2019 |
0.27 |
0.26 |
Table 2: Changes in the Index components in recent months
(monthly percent change, unless otherwise noted)
|
|
March 2020 |
February 2020 |
January 2020 |
December 2019 |
|
Industrial Production Index (excluding mining and quarrying) |
|
1.7 |
3.8 |
0.6 |
|
Services Revenue Index (excluding education and public administration) |
|
-2.8 |
-0.4 |
2.6 |
|
Retail Trade Revenue Index |
|
0.3 |
0.0 |
0.5 |
|
Imports of consumer goods1 |
-3.8 |
-6.2 |
-13.0 |
14.3 |
|
Imports of manufacturing inputs (excluding fuels) |
0.4 |
-5.6 |
7.4 |
-7.1 |
|
Goods exports (excluding agriculture) 1 |
-21.9 |
1.6 |
2.9 |
-2.8 |
|
Services exports (excluding transportation) 2 |
|
|
-5.3 |
1.1 |
|
Number of employee posts in the private sector |
|
|
|
0.2 |
|
Job vacancy rate in the business sector3 |
2.1 |
3.0 |
3.1 |
3.3 |
|
Building starts4 |
|
|
|
2.6 |
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.
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