The Composite State of the Economy Index for February 2021 increased by 0.4 percent

The Composite State of the Economy Index for February 2021 increased by 0.4 percent, in view of the start of easing the restrictions of the third lockdown


The Bank of Israel's Composite State of the Economy Index for February increased by 0.4 percent, due to the easing of restrictions in the third lockdown, which took place as morbidity moderated due to the vaccination campaign that began in Israel in December (Table 1). 

 

The Composite Index for February was positively affected by increases in the job vacancy rate (January and February), the services revenue index (January), employee posts (December), and building starts (December). In addition, following the decline in the retail trade revenue index in January, the dynamic of the model points to a renewed increase in February. This expectation is also supported by positive data from the Business Tendency Survey for February.  In contrast, the import of consumer goods, goods exports, and imports of manufacturing inputs (excluding fuels) declined in February, which had a negative impact on the 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, and particularly not regarding the relative intensity between various months.

 

 

Table 1: Revisions in the Composite Index

Revision

Previous figure

New figure

February

 

0.40

January 2021

-0.16

-0.26

December 2020

0.43

0.64

November

0.77

0.79

October

-0.52

-0.65

September

0.15

0.10

 

 

 

Table 2: Changes in the Index components in recent months

(monthly percent change, unless otherwise noted)

 

February 2021

January 2021

December

2020

November

2020

Industrial Production Index

(excluding mining and quarrying)

 

-0.5

0.5

1.3

Services Revenue Index

(excluding education and public administration)

 

1.4

-0.8

5.2

Retail Trade Revenue Index

 

-5.7

-0.2

9.8

Imports of consumer goods1

-0.2

-3.9

5.2

6.4

Imports of manufacturing inputs

(excluding fuels)1

-1.3

4.0

0.6

1.8

Goods exports (excluding agriculture)1

-7.4

-2.0

-2.6

-3.0

Services exports (excluding transportation)2

 

 

-1.0

-0.2

Number of employee posts in the private sector

 

 

3.0

5.0

Job vacancy rate in the business sector3

2.9

2.7

2.6

2.5

Building starts4

 

 

6.8

 

 

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