The Composite State of the Economy Index for September 2021 remained stable

The Bank of Israel's Composite State of the Economy Index for September remained stable (increasing by 0.04 percent), in contrast with the on-going increases since January 2021 due to the reopening of the economy in February following the third lockdown. The Index was positively affected by increases in the services revenue index (August), the retail trade revenue index (August), the import of consumer goods (September), the import of production inputs (September), and employee posts (July). The job vacancy rate in September remained at a record high, reflected the continued desire of employers (other than those in the incoming tourism field) to expand their operations following the reopening of the economy.  In contrast, goods exports (September) declined sharply, while the Industrial Production Index (August) and services exports (July) also declined, and had a negative impact on the Index.   Estimates of missing end-of-sample observations based on the Business Tendency Survey conducted in September also had a negative impact on the Index.

 

Index data for previous months changed only slightly (Table 1).  Table 2 presents the development of components of the Index in the past few months.

 

In view of the uniqueness of the crisis and the resulting measurement difficulties, the changes in the Index should not be used as an indicator of the precise intensity of changes in economic activity, and particularly not regarding the relative intensity between various months.

 

 

Table 1: Revisions in the Composite Index

Revision

Previous figure

New figure

September

 

0.04

August

0.28

0.25

July

0.21

0.21

June

0.31

0.37

May

0.19

0.19

April

0.72

0.72

 

 Table 2: Changes in the Index components in recent months

(monthly percent change, unless otherwise noted)

 

September 2021

August 2021

July 2021

June 2021

Industrial Production Index

(excluding mining and quarrying)

 

-2.3

1.7

3.8

Services Revenue Index

(excluding education and public administration)

 

2.3

-0.6

4.8

Retail Trade Revenue Index

 

3.5

-2.1

3.5

Imports of consumer goods1

1.5

2.4

-1.7

3.2

Imports of manufacturing inputs

(excluding fuels)1

2.9

6.1

0.1

4.9

Goods exports (excluding agriculture)1

-7.0

0.4

8.0

-0.5

Services exports (excluding transportation)2

 

 

-2.1

3.9

Number of employee posts in the private sector

 

 

2.0

1.4

Job vacancy rate in the business sector3

4.9

4.8

4.8

4.7

Building starts4

 

 

 

3.9

 

1 Goods imports and exports are calculated in fixed prices (adjusted for changes in foreign trade price indices).

2 Services exports are calculated in real terms using the Consumer Price Index, and are comprised of the export of other business services and the export of tourism services.

3 The job vacancy rate is calculated out of the total number of employed people, and is included in the index at its seasonally adjusted level.

4 Since the Central Bureau of Statistics publishes data on building starts once per quarter, the data integrated into the model are at a monthly frequency based on additional sources, such that the distribution is consistent with the quarterly data published by the Central Bureau of Statistics (in percent, seasonally adjusted).

 

 

 

 

 

 

Detailed explanations regarding how the Composite Index is calculated, as well as detailed long-term tables, can be found at

https://www.boi.org.il/en/Research/Pages/ind.aspx