The slowdown in business sector activity continues

A slowdown in domestic demand is evident

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The Melnick State of the Israeli Economy Index increased by 0.1 percent in August 2023. The slowdown in the economic activity of the business sector continues. The local slowdown results from a combination of the slowdown in economic activity in the world and the effect of the attempt at a far-reaching structural change of the legal system in Israel. The revenue in commerce and services, which reflects domestic demand and especially private consumption, expresses fluctuations in private consumption so that despite its recent increase, it does not offset the sharp drop in the second quarter summary. The industrial production index, which reflects the supply side of the business sector, indicates a similar development – fluctuations in the industry’s activity, against a background of weakness. The development of the import index, which consists mainly of inputs for domestic production, indicates a continuation of the downward trend since October 2022. The number of employee posts in the business sector has decreased – a continuation of the trend started last year in the labor market.

The components of the July Index include a 2.1% increase in the industrial production index in July, after a 1.3% decrease in June; an increase of 1.1% in revenue in commerce and services in July  after a decrease of 2.4% in June; a 1.9% decrease in the import index in August, after a 2.5% increase in July; and a 0.2% decrease in the number of employee posts in the business sector in June, after a 0.3% increase in May.

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