Israel: PMI drops sharply but remains in expansionary territory in August

Business conditions in Israel continued to improve midway through the third quarter, albeit at a softer pace, as the Purchasing Managers’ Index (PMI)—produced by Bank Hapoalim together with the Israeli Purchasing & Logistics Mangers Association (IPLMA)—fell to 50.4 points in August from 58.0 points in July.

August’s print largely reflected a sharp contraction in foreign orders, as well as slower growth in domestic orders and output. In addition, companies shed staff, with the PMI’s employment component falling into contractionary territory. Companies also moderated their purchasing activities in August. In terms of price pressures, raw material price inflation eased as input costs dropped compared to the prior month.

Israel Fixed Investment Forecast

FocusEconomics Consensus Forecast participants expect fixed investment to increase 5.3% in 2018, unchanged from last month’s forecast. For 2019, the panelists expect fixed investment to expand 4.9%, unchanged from last month’s projection.