Israel: Composite State of the Economy Index records weakest reading in six months in October
November 26, 2020
The Bank of Israel’s Composite State of the Economy Index expanded 0.06% month-on-month in seasonally-adjusted terms in October, which was a deterioration from September's 0.28% increase. The figure marked the worst reading since April. October’s slowdown reflected lower consumer goods imports in the month, as well as a contraction in retail sales in September. The index is calculated using the latest available data and hence uses a combination of figures from recent months to provide a comprehensive picture of the economy’s performance.
On an annual basis, economic activity fell 0.1% in October (September: +0.1% yoy).
It should be noted that significant revisions were made to the historical series this month, which make the economic picture over the past months appear much more positive than was previously the case. Bank of Israel stated that the revisions were due to the statistical institute resuming the calculation of seasonally adjusted data.
Prospects for Q4 are downbeat due to the second lockdown, which only began to be lifted partially from mid-October. Moreover, a possible flare-up in cases could slow or reverse the easing of restrictions.
Author: Oliver Reynolds, Economist