The Melnick State of the Economy Index unchanged in February

תפריט

29/03/2023

The slowdown in the business sector is worsening

The decrease in import of inputs reflects pessimism regarding future economic activity

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The Melnick State of the Israeli Economy Index did not change in February 2023. The slowdown in the business sector is worsening. According to the Index, the output of the business sector did not increase at all in the last month. The revenue in commerce and services, which reflects domestic demand, and especially private consumption, has been oscillating around a constant level and reflects the weakness of private consumption. The industrial production index, which reflects the supply side of the business sector, continues to show weakness. The import index, which consists mainly of inputs for domestic production, continues to decrease. This development is worrisome because the dependence of domestic production on the import of inputs is large and the decrease in their import portends a future decrease in the activity of the business sector. The number of employee posts in the business sector has also decreased, but it is still not possible to talk about weaknesses in the labor market.

The components of the February Index include: a 1.6% decrease in the industrial production index in January, after a 0.2% increase in December; a 1.3% increase in revenue in commerce and services in January after a 1.4% decrease in December; a decrease of 0.9% in the import index in February, after a decrease of 3.4% in January; and a 0.3% decrease in the number of employee posts in the business sector in December, after a 1.2% increase in November.