The Melnick State of the Economy Index unchanged in March

תפריט

08/05/2023

The restraint of economic activity continues

The continued decrease in the 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 March 2023. The containment of economic activity continues. According to the Index the business sector did not grow in the first quarter of 2023. The revenue in trade and services, which reflects domestic demand and especially private consumption, reflects the halt in the growth of private consumption. The industrial production index, which reflects the supply side of the business sector, is characterized by fluctuations without a clear trend and continues to show weakness. The import index, which consists mainly of inputs for domestic production, has been continuously decreasing since October 2022. This development is worrying because the dependence of domestic production on the import of inputs is very large and a decrease in it indicates a future decrease in the activity of the business sector. The number of employee posts in the business sector decreased, but this cannot yet be attributed to weakness in the labor market.

The components of the March Index include: a 4.2% increase in the industrial production index in February, after a 2.1% decrease in January; a decrease of 0.8% in revenue in trade and services in February after a 1.4% increase in January; a 0.7% decrease in the import index in March, after a 1.3% decrease in February; and a 0.6% decrease in the number of employee posts in the business sector in January, after a decrease of 0.3% in December.