Israel: Manufacturing PMI falls into contractionary territory on the back of softening domestic demand
The Purchasing Managers’ Index (PMI)—produced by Bank Hapoalim in conjunction with the Israeli Purchasing & Logistics Managers Association (IPLMA)—fell to 49.6 points in May, down from 54.0 in April. As a result, the index fell into contractionary territory after five consecutive months above the crucial 50-point threshold that separates expansion from contraction in the manufacturing sector.
The result came chiefly on the back of weakening domestic demand, as foreign demand was unchanged—despite declining industrial exports—and employment gains were strong. Due to softer local demand, output growth moderated markedly and stocks of finished goods increased.