Israel: Israeli manufacturing PMI returns to expansionary territory at the close of the second quarter

The Purchasing Managers’ Index (PMI)—produced by Bank Hapoalim in conjunction with the Israeli Purchasing & Logistics Managers Association (IPLMA)—jumped to 52.6 points in June from 49.6 points in May. As a result, the index moved back above the crucial 50-point threshold that separates expansion from contraction in the manufacturing sector.

June’s increase was driven by a rise in accrual purchases and faster employment growth, likely due to robust domestic demand and production output. Foreign demand, however, contracted on the back of a drop in exports of electronic components. Inventories of finished goods and raw materials continued to decline, albeit at a more moderate pace. Raw material price inflation eased in June.

FocusEconomics Consensus Forecast participants expect fixed investment to increase 5.7% in 2018, down 0.6 percentage points from last month’s forecast. For 2019, the panelists expect fixed investment to expand 5.2%.