The corona crisis led to an unprecedented 1.8 percent decline in the Composite State of the Economy Index for May 2020, and to anomalous downward revisions for previous months

The Bank of Israel's Composite State of the Economy Index for May 2020 declined by 1.8 percent, the sharpest ever decline in the index in its current format, which has been used since 1998. A compilation of data showing the depth and duration of the crisis, including National Accounts data for the first quarter, led to the sharp decline and to anomalous revisions to the index readings for previous months.  In view of the uniqueness of the crisis, the intensity of the decline in the Index should not be used to draw conclusions about the precise intensity of the decline in activity, particularly the relative intensity between the various months.  This is because final data for some of the indicators are published with a lag, and have an effect on the trends of the Index.


The decline in the Index reflects sharp declines in most components, chiefly in imports of manufacturing inputs in May, and in the Industrial Production Index and the Trade and Services Revenue indices in April.  In contrast, the job vacancy rate recovered slightly after the sharp declines between February and April.  As stated, the Composite Index data for March and April were revised sharply downward (Table 1).  The sharp downward revision is due to the revision of some of the indicators published by the Central Bureau of Statistics[1], and to the negative and cumulative effect of the various indicators on the index’s trend[2], which currently reflects an extreme and continued contraction of economic activity. Table 2 presents the development of components of the Index in the past few months.


Detailed explanations of how the Composite Index is calculated, as well as detailed long-term tables, can be found at: /Research/Pages/ind.aspx




Table 1: Revisions in the Composite Index


Previous data

New data

May 2020



April 2020



March 2020



February 2020





Table 2: Changes in the Index components in recent months*

(monthly percent change, unless otherwise noted)






March 2020

February 2020

Industrial Production Index

(excluding mining and quarrying)1





Services Revenue Index

(excluding education and public administration)1





Retail Trade Revenue Index1





Imports of consumer goods2





Imports of manufacturing inputs

(excluding fuels)





Goods exports (excluding agriculture) 2





Services exports (excluding transportation) 3





Number of employee posts in the private sector





Job vacancy rate in the business sector4





Building starts5






*As the Central Bureau of Statistics (CBS) has not calculated seasonally adjusted series for some of the variables, there could be a lack of alignment between some of the data appearing in the Composite State of the Economy Index tables and the data in CBS publications.

1 As the CBS did not seasonally adjust in March and April, industrial production data and revenue data for those months were calculated based on a seasonality factor forecast for those months, and the series were not adjusted retroactively.

2 Goods imports and exports are calculated in fixed prices (adjusted for changes in foreign trade price indices).

3 Services exports are calculated in real terms (using the Consumer Price Index).

4 The job vacancy rate is calculated out of the total number of employed people, and is included in the index at its level. As the CBS did not seasonally adjust between March and May, the data for those months are not seasonally adjusted.

5 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).





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[1] In particular, the Retail Trade Revenue Index for March was revised downward from an increase of 3.3 percent to a decline of 15.8 percent, and Imports of Consumer Goods for March were revised fro ma decline of 3.8 percent to a decline of 6.2 percent.

[2] In view of the serious changes in business activity as a result of the corona crisis, beginning in February, the calculation of the pace of the trend is based on a regime switching model, which is added to the regular Kalman Filter-based system.​