The Composite State of the Economy Index for March 2021 increased by 0.5 percent, reflecting the expansion of economic activity with the cancellation of most COVID-19-related restrictions

The Bank of Israel's Composite State of the Economy Index for March increased by 0.5 percent, in view of the cancellation of most restrictions for dealing with the COVID-19 pandemic and the resulting expansion of economic activity.  These changes were made possible due to progress in the vaccination campaign that began in Israel in December 2020 and has succeeded in greatly moderating morbidity and infection (Table 1).  As a reflection of the broad reopening of businesses (other than the incoming tourism industry), the job vacancy rate jumped in March to a record high for this indicator.[1]

 

Beyond the job vacancy rate, the Composite Index for March was positively affected by increases in the import of consumer goods (March), import of manufacturing inputs (March), services exports (January), the services revenue index (February), and the retail trade revenue index (February). As expected in the previous month, the increase in the retail trade revenue index in February cancelled out the effect of the decline in that index in January. In contrast, goods exports (March), the Industrial Production Index (February), and employee posts (January) declined, 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.

 

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

 

 

 

Table 1: Revisions in the Composite Index

Revision

Previous figure

New figure

March

 

0.50

February

0.40

0.45

January 2021

-0.26

-0.34

December 2020

0.64

0.67

November

0.79

0.81

October

-0.65

-0.67

 

 

 

 

Table 2: Changes in the Index components in recent months

(monthly percent change, unless otherwise noted)

 

March 2021

February 2021

January 2021

December

2020

Industrial Production Index

(excluding mining and quarrying)

 

-1.1

-1.1

0.2

Services Revenue Index

(excluding education and public administration)

 

2.1

0.9

-0.4

Retail Trade Revenue Index

 

6.2

-6.1

0.2

Imports of consumer goods1

4.7

-0.3

-4.0

6.1

Imports of manufacturing inputs

(excluding fuels)1

3.7

-1.3

4.3

0.5

Goods exports (excluding agriculture)1

-0.5

-0.9

-1.9

-2.6

Services exports (excluding transportation)2

 

 

7.8

-0.6

Number of employee posts in the private sector

 

 

-5.4

3.1

Job vacancy rate in the business sector3

4.4

2.9

2.7

2.6

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.  The figure for March is not seasonally adjusted, since the Central Bureau of Statistics did not calculate a seasonal adjustment for March due to the exceptional change in the figure.

4 Since the Central Bureau of Statistics publishes data on building starts once per quarter, the data integrated into the model are distributed monthly 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).

 

 

 

 

 

 



[1] The job vacancy rate figure for March is not seasonally adjusted, since the Central Bureau of Statistics did not calculate a seasonal adjustment for March due to the exceptional change in this figure.​