The business sector has stopped growing
It is possible that the halt in growth is beginning to manifest itself in the labor market
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The Melnick State of the Israeli Economy Index remained unchanged in April 2023, indicating a halt in the growth of the business sector. According to the Index, the level of activity in the business sector during April 2023 is similar to that of November 2022. This slowdown in business sector activity began in the last quarter of 2022, primarily due to negative global developments and further exacerbated by attempted government legal legislation. The revenue in trade and services, which reflects domestic demand and particularly private consumption, indicates stagnation in private consumption. The industrial production index, which reflects the supply side of the business sector, continues to experience significant fluctuations without a clear trend, highlighting ongoing weakness. The import index, primarily composed of inputs for domestic production, did not decrease this month after a continuous decline since October 2022. However, it remains 11.4% lower compared to the corresponding month last year, suggesting a potential future decline in business sector activity. Furthermore, the number of employee posts in the business sector has once again decreased, indicating that the growth slowdown may now be affecting the labor market as well.
The components of the April Index include: a 2.7% decrease in the industrial production index in March, after a 4.5% increase in February; a 1.5% increase in revenue in trade and service in March after a 0.5% decrease in February; a 0.5% increase in the import index in April, after a 1.0% decrease in March; and a 0.4% decrease in the number of employee posts in the business sector in February, after a decrease of 0.7% in January.
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