The Composite State of the Economy Index for December 2020 increased by 0.52 percent

The Bank of Israel's Composite State of the Economy Index for December increased by 0.52 percent, influenced by the continued gradual cancellation, starting in mid-October, of restrictions from the second lockdown. Toward the end of December, following a renewed increase in morbidity, a third lockdown began. Since most data for building the Index are obtained with a lag, the Index for December still does not reflect the change in economic activity resulting from the increased morbidity and the start of the third lockdown. The increase in the Composite Index for December reflects an increase in all components of the Index: Industrial Production (November), the revenue indices (November), import of consumer goods and inputs (December), goods exports (December) and job vacancy rate (December). Table 2 presents the development of components of the Index in the past few months. The October data for the remaining components, received in December, led to a downward revision in the Index for October (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.

Table 1: Revisions in the Composite Index

Revision	Previous figure	New figure
December 2020		0.52
November	0.67	0.65
October	0.02	-0.12
September	0.28	0.23
August	0.42	0.47
July	0.09	0.09

Table 2: Changes in the Index components in recent months^♦

(monthly percent change, unless otherwise noted)

	December 2020	November 2020	October 2020	September 2020
Industrial Production Index (excluding mining and quarrying)		1.1	-0.4	1.8
Services Revenue Index (excluding education and public administration)		3.6	-1.9	-1.5
Retail Trade Revenue Index		9.3	-1.1	-8.2
Imports of consumer goods1	9.8	7.9	-2.5	11.6
Imports of manufacturing inputs (excluding fuels)1	2.2	2.4	1.0	3.0
Goods exports (excluding agriculture)1	1.0	-3.5	2.2	13.9
Services exports (excluding transportation)2			1.4	4.6
Number of employee posts in the private sector			-10.0	-0.3
Job vacancy rate in the business sector3	2.6	2.5	2.4	2.3
Building starts4				6.3

¹Goods imports and exports are calculated in fixed prices (adjusted for changes in foreign trade price indices).

²Services 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.

³The job vacancy rate is calculated out of the total number of employed people, and is included in the index at its seasonally adjusted level.

⁴Since 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

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