Israel: Economic activity weakens sharply in May; previous figures revised down
June 24, 2019
The Bank of Israel’s Composite State of the Economy Index rose 0.13% in May over the previous month, down from April’s revised 0.23% figure (previously reported: +0.28% mom). On a year-on-year basis, growth in the index clocked 3.4%, a notch below April’s 3.5% reading.
Data for March and February was also revised down. This chimes with the second release of Q1 GDP data, which showed the economy expanded by slightly less than previously estimated in the first quarter (revised data: +4.8% SAAR; initial estimate: +5.2% SAAR) on weaker-than-previously-estimated domestic and external momentum.
May’s figure was dampened by lower exports and consumer goods imports in May, and lower building starts in March. Solid industrial production in April supported the reading. However, the fall in consumer goods imports was likely influenced in part by a front-loading of vehicle purchases in Q1 ahead of tax changes, distorting the figure slightly. 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.
Author: Oliver Reynolds, Economist