The Composite State of the Economy Index for January 2022 increased by 0.12 percent

The Bank of Israel's Composite State of the Economy Index increased by 0.12 percent in January (Table 1), in the midst of the fifth (Omicron) wave of the COVID-19 pandemic. This figure is markedly lower than the readings for October and November, prior to the start of the fifth wave.

 

The Index was positively affected by increases in the Industrial Production Index (December), the import of consumer goods (January), the import of production inputs (January), and employee posts (November).  The job vacancy rate in January remained at a record high that reflects employers’ continued desire to expand their operations following the reopening of the economy. In contrast, the services revenue index (December), the retail trade revenue index (December), goods exports (January), and services exports (November) declined and had a negative effect on the Index.

 

The upward revision of data for August–November was, to a great extent, due to fourth quarter growth of GDP, which was higher than previous assessments, and to the upward revision of GDP growth figures for the previous quarters of 2021.  Table 1 presents the revisions to the Composite Index.  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.

 

 

Table 1: Revisions in the Composite Index

Revision

Previous figure

New figure

January

 

0.12

December

-0.05

-0.1

November

0.10

0.46

October

0.14

0.61

September

0.10

0.17

August

0.16

0.23

 

 

 

 

 

 

Table 2: Changes in the Index components in recent months

(monthly percent change, unless otherwise noted)

 

January

December

November

October

Industrial Production Index

(excluding mining and quarrying)

 

5.8

-4.1

1.2

Services Revenue Index

(excluding education and public administration)

 

-4.1

2.0

1.3

Retail Trade Revenue Index

 

-0.2

-1.3

-0.1

Imports of consumer goods1

6.2

-2.6

2.4

-2.3

Imports of manufacturing inputs

(excluding fuels)1

6.4

0.3

2.3

-0.1

Goods exports (excluding agriculture)1

-4.9

-1.5

0.8

5.0

Services exports (excluding transportation)2

 

 

-0.1

0.4

Number of employee posts in the private sector

 

 

1.2

0.8

Job vacancy rate in the business sector3

4.9

5.0

5.0

5.0

Building starts4

 

 

 

 

 

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

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