Bank of Israel : The Composite State of the Economy Index for December 2013 increased by 0.2%

January 19, 2014 at 09:26 pm IST

MarketScreener.com By

BANK OF ISRAEL

Office of the Spokesperson and Economic Information

January19, 2014

Press Release

The Composite State of the Economy Index for December 2013 increased by 0.2%

The Bank of Israel's Composite State of the Economy Index for December increased by 0.2 percent. The rate of increase in the Index continues to indicate a stable rate of growth in the economy in recent months. Among the factors that made a particular contribution to the increase in the Index were the increases in imports of consumer products, and in the Trade Revenue Index. In contrast, declines in the export of goods and in the export of services contributed negatively to the rate of increase in the Index. This month, there were no significant revisions of the Index's data for previous months (Table 1). Table 2 presents the development of components of the Index in the past few months.

Summing up 2013, the Composite Index shows a slowdown in the growth rate (on an annual average) compared to 2012: It increased by 2.8 percent, following an increase of 3.9 percent in 2012. The slowdown derived mainly from the decline in industrial production, the decline in the imports of manufacturing inputs and a slowdown in the rate of growth of employee posts and in the job vacancy rate. In contrast, indices of activity in the trade and services industries and in the import of consumer products contributed to the increase in the Index.

In contrast with the slowdown in the Composite Index, Central Bureau of Statistics estimates of the business product growth rate indicate stability in the growth rate-3.5 percent in 2013 compared with 3.4 percent in 2012. Such differences are not exceptional, and derive from the fact that the calculation of the Composite Index does not force the growth rate of the index to comply with the business product growth rate each year, but only in a multiyear average. In particular, the start of natural gas production from the Tamar site contributed about 1 percent to the business product growth rate in 2013, while its contribution to the growth rate of the Composite Index was much lower, since the change in business product is just one of the components of the Index. The contribution of the start of natural gas production to the Composite Index was mainly reflected in a slight acceleration of the growth rate in the second quarter. Other than this acceleration, the growth rate of the Index was stable throughout the year.

Table 1: Revisions in the Composite Index

Revision	Previous data	New data
December		0.21
November	0.23	0.23
October	0.23	0.24
September	0.21	0.22

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)		-0.05	3.47	0.67
Services Revenue Index (excluding finance, education, and public administration)		-0.47	0.54	1.26
Trade Revenue Index		0.60	0.98	-0.34
Imports of consumer products3	1.08	4.59	-8.18	5.62
Imports of manufacturing inputs (excluding fuels)3	-0.51	-0.58	1.86	5.69
Goods exports (excluding agriculture) 3	-6.70	-0.83	6.17	6.46
Services exports (excluding transportation) 3	-5.47	1.23	-1.91	1.35
Number of employee posts in the private sector			0.13	-0.41
Rate of vacant employee posts out of total number of employed people in the business sector1	2.59	2.58	2.63	2.65
Building starts2			-1.77	-0.38