The Composite State of the Economy Index for September 2020 increased by 0.1 percent, signaling a slight increase in economic activity until the start of the second lockdown

The Bank of Israel's Composite State of the Economy Index for September increased by 0.13 percent, signaling a slight increase in economic activity during the third quarter of 2020 until the start of the second lockdown.  The increase in the index for September reflects increases in the components reported for August–September.  Since most of the data used in building the index are obtained with a lag, the index for September still does not reflect the change in economic activity due to the start of the second lockdown on September 17.  The only figure reported thus far that declined in September is the job vacancy rate.  Table 2 presents the development of components of the Index in the past few months.

 

A revision of the data for previous months shows that economic activity in May–June was greater than previously reported, and that in the third quarter as a whole, there was a slight increase in activity.  These revisions are due to the Central Bureau of Statistics’s gradual return to calculating seasonally adjusted data for most series, and to the built-in statistical smoothing in the calculation of the Index (Table 1).

 

In view of the uniqueness of the crisis and the resulting measurement difficulties, the intensity of 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

September 2020

 

0.13

August 2020

-0.06

0.03

July 2020

-0.02

-0.07

June 2020

0.14

0.21

May 2020

-0.90

-0.64

 

Table 2: Changes in the Index components in recent months

(monthly percent change, unless otherwise noted)

 

September 2020

August

2020

July

2020

June

2020

Industrial Production Index

(excluding mining and quarrying)

 

0.7

-3.3

2.7

Services Revenue Index

(excluding education and public administration)

 

0.5

2.2

7.4

Retail Trade Revenue Index

 

-0.4

0.7

5.7

Imports of consumer goods2

12.5

-1.2

4.1

12.9

Imports of manufacturing inputs

(excluding fuels)

2.7

-1.1

0.9

1.5

Goods exports (excluding agriculture)1

10.9

4.4

-10.7

-2.0

Services exports (excluding transportation)2

 

 

-3.0

-6.6

Number of employee posts in the private sector

 

 

0.1

11.1

Job vacancy rate in the business sector3

2.2

2.4

2.1

2.1

Building starts4

 

 

 

 

 

Since the Central Bureau of Statistics did not calculate seasonally adjusted series for some of the variables, there may be inconsistencies between some of the variables appearing the Composite Index tables and Central Bureau of Statistics publications.

 

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.  Since the Central Bureau of Statistics did not calculate seasonal adjustments for March–July for data on the export of tourism services, services export data for March–July are the sum of other business services exports seasonally adjusted and tourism services exports using original data.

3 The job vacancy rate is calculated out of the total number of employed people and is included in the index at its level.  Sine the Central Bureau of Statistics did not calculate seasonal adjustments for March–September, the data for those months are not seasonally adjusted.

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).

 

 

 

For additional data and explanations, please click here.

http://www.boi.org.il/en/Research/Pages/ind.aspx

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