The slowdown in business sector activity continues
A significant slowdown in economic growth is evident in the second quarter
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The Melnick State of the Israeli Economy Index unchanged in July 2023. The slowdown in the economic activity of the business sector continues. In the second quarter, a significant slowdown in growth is evident. As stated in previous announcements, the local slowdown results from a combination of the slowdown in economic activity in the world and the effect of the attempt to radically change the legal system in Israel. The revenue in commerce and services, which reflects domestic demand and especially private consumption, expresses fluctuations in private consumption with a relatively sharp decrease this month. The industrial production index, which reflects the supply side of the business sector, also expresses fluctuations in the industry’s activity and indicates a growing weakness on the supply side. The import index, which consists mainly of inputs for domestic production, rose this month, but this increase does not offset the ongoing decline from October 2022. The number of employee posts in the business sector has increased slightly, but this increase also does not change the picture of the slowdown reflected from the end of last year in the labor market as well.
The components of the July Index include: a 1.0% decrease in the industrial production index in June, after a 1.7% decrease in May; a decrease of 2.3% in revenue in commerce and services in June after an increase of 0.8% in May; a 2.0% increase in the import index in July, after a 3.2% decrease in June; and a 0.3% increase in the number of employee posts in the business sector in May, after a 0.6% decrease in April.
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