A recovery in the activity of the business sector is evident
The recovery is led by a sharp increase in private consumption
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The Melnick State of the Israeli Economy Index rose by 0.3 percent in February 2024, signaling a notable recovery in business sector activity. This increase marks a turnaround following a downturn at the onset of the war months. While business sector output has rebounded, it remains below pre-war levels. Notably, a significant surge in private consumption has been instrumental in driving this economic revival over the past two months. The surge in revenue from commerce and services, a key indicator of domestic demand largely influenced by private consumption, has been particularly robust. Meanwhile, the industrial production index, reflecting the supply side of the business sector, has also seen a sharp increase, although it has yet to fully recover to pre-war levels. The import index, comprising primarily inputs for domestic production, has shown signs of correction, though a sustained upward trend is yet to be confirmed. Encouragingly, the decline in employee positions within the business sector has halted, suggesting a moderation in labor market weakness.
The components in February Index include: a 3.8% increase in the industrial production index in January, after a 1.6% decrease in December; a 4.6% increase in revenue in commerce and services in January after an 8.4% increase in December; a 6.6% increase in the import index in February, after a 0.2% decrease in January; and a 1.6% increase in the number of employee posts in the business sector in December, after a 2.4% decrease in November.
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