The Composite State of the Economy Index for March increased by 0.2 percent

With the end of the fifth morbidity wave (the Omicron wave) and the return of economic activity and of the labor market to their strong levels from before the COVID-19 crisis, the Composite State of the Economy Index for March increased by 0.2 percent.  It seems, thus far, that the war in Ukraine, which led to a marked increase in commodity prices, has not led to a significant impact to real economic activity in Israel.

 

The Index was positively affected by increases in the Industrial Production Index (February), the services revenue index (February), and the import of production inputs (March). The job vacancy rate remains at a record high that reflects the continued desire of employers to expand their operations following the reopening of the economy.  In contrast, the import of consumer goods (March) and goods exports (March) declined, which had a negative impact on the Index. 

 

Table 1 presents the revisions to the Index for previous months.  The Index for February was revised upward (from a slight contract to a moderate expansion), influenced by positive industrial production and services revenue data.

 

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

March

 

0.19

February

-0.08

0.10

January

0.06

0.07

December

-0.09

-0.09

November

0.40

0.40

October

0.51

0.51

 

 

 

 

 

Table 2: Changes in the Index components in recent months

(monthly percent change, unless otherwise noted)

 

March

February

January

December

Industrial Production Index

(excluding mining and quarrying)

 

1.1

1.1

6.4

Services Revenue Index

(excluding education and public administration)

 

4.0

1.4

-6.4

Retail Trade Revenue Index

 

0.6

0.9

-0.4

Imports of consumer goods1

-6.0

-2.5

7.5

-3.0

Imports of manufacturing inputs

(excluding fuels)1

2.6

-2.4

7.1

-0.1

Goods exports (excluding agriculture)1

-0.4

5.0

-1.3

-0.3

Services exports (excluding transportation)2

 

 

0.1

1.0

Number of employee posts in the private sector

 

 

0.4

0.8

Job vacancy rate in the business sector3

5.1

5.1

5.0

4.9

Building starts4

 

 

 

3.8

 

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​