Israel: Business activity in manufacturing sectors slumps to a near three-year low
Israel’s manufacturing sector got off to a bad start in 2019. The Purchasing Managers’ Index (PMI), produced by Bank Hapoalim and the Israeli Purchasing & Logistics Managers Association (IPLMA), fell from 57.0 in December to 47.9 in January. This marked the lowest reading since February 2016 and came on the back of a broad-based deterioration in underlying components. Moreover, the index moved south of the critical 50-point mark separating expansion from contraction in the country’s manufacturing sector.
A massive fall in domestic new orders and significantly slower output growth were chiefly behind the contraction in the sector. Furthermore, the fall in the headline figure was also affected by the third consecutive monthly fall in new export orders, a contraction in stocks of finished goods, a decrease in inventories and a reduction in purchasing activity. On the other hand, despite the first contraction in seven months, Israeli manufacturers continued to increase their payrolls; however, employment grew at a noticeably softer pace than in December.