The Composite State of the Economy Index for December 2021 declined by 0.05 percent

The Bank of Israel's Composite State of the Economy Index declined by 0.05 percent in December (Table 1), with the beginning of the fifth (Omicron) wave of the COVID-19 pandemic. Since most of the data for building the index are obtained at a lag, the index for December only partly reflects the change in economic activity resulting from the fifth wave, at the beginning of which it was decided to close the skies, resulting in a decline in incoming tourism, which was in any case very low.

 

The Index was negatively affected by declines in the Industrial Production Index (November), the retail trade revenue index (November), the import of consumer goods (December), the import of production inputs (December), and the decline in building starts (September). In contrast, the services revenue index (November), services exports (October), and employee posts (October) increased and had a positive effect on the Index. The job vacancy rate remained unchanged in December, at a record high level that reflects the continued desire of employers to expand their operations following the reopening of the economy.  Goods exports (December) remained virtually unchanged.

 

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

December

 

-0.05

November

0.16

0.1

October

0.13

0.14

September

0.07

0.1

August

0.16

0.16

July

0.08

0.08

 

 

 Table 2: Changes in the Index components in recent months

(monthly percent change, unless otherwise noted)

 

December

November

October

September

Industrial Production Index

(excluding mining and quarrying)

 

-3.5

0.8

0.9

Services Revenue Index

(excluding education and public administration)

 

1.2

1.3

2.3

Retail Trade Revenue Index

 

-1.4

0.1

1.0

Imports of consumer goods1

-4.3

2.1

-2.7

3.7

Imports of manufacturing inputs

(excluding fuels)1

-1.2

2.1

-0.8

2.8

Goods exports (excluding agriculture)1

0.0

0.4

3.8

-2.2

Services exports (excluding transportation)2

 

 

1.7

3.2

Number of employee posts in the private sector

 

 

0.7

0.7

Job vacancy rate in the business sector3

4.9

4.9

4.9

4.9

Building starts4

 

 

 

-7.0

 ​

 

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