The Bank of Israel’s Composite State of the Economy Index for December 2015 increased by 0.2 percent. The Index continues to increase at the pace that has characterized it recently. The increase  in the Composite Index reflects an increase in most of its components, mainly a sharp increase in industrial production for November.   In contrast, the decline in goods exports in December moderated the pace of increase in the Index.   The Index for November was revised slightly upward, since actual data were stronger than the estimate for industrial production and for services exports for that month[1] (Table 1). Table 2 presents the development of components of the Index in the past few months.

 
Summarizing 2015, the Composite Index (annual average) increased by 2.9 percent, following growth of 2.1 percent in the previous year.  The pace of growth of the Composite Index accelerated in 2015, in contrast with a slight moderation in the business product growth rate from 2.3 percent in 2014 to 2.1 percent in 2014.[2]  A main contributing factor to this is that the Composite Index includes two components that reflect the improvement in the labor market in 2015 (employee posts in the private sector and the job vacancy rate).   The yearly difference in the growth rate reflects the difference in the second quarter of the year, when business sector product declined by 1.1 percent while the Composite Index increased by 3 percent (both in annual terms).  The acceleration in the growth rate of the Composite Index in 2015 reflected particularly the acceleration in the growth rate of the trade and services revenue indices and a sizeable increase in the job vacancy rate, while the declines in the goods and services exports indices partly offset the annual increase in the Index.
 
Table 1: Revisions in the Composite Index
Revision
Previous data
New data
December
 
0.22
November
0.16
0.28
October
0.22
0.25
September
0.08
0.11
 

 
Table 2: Changes in the Index components in recent months
(monthly percent change, unless otherwise noted)
 
December
November
October
September
Industrial Production Index (excluding mining and quarrying)
 
7.3
-2.3
-3.2
Services Revenue Index (excluding finance, education, and public administration)
 
-0.2
0.8
-0.5
Trade Revenue Index
 
1.5
0.6
-0.6
Imports of consumer goods3
5.5
-4.2
10.9
-10.4
Imports of manufacturing inputs (excluding fuels)3
4.8
-3.3
4.7
-3.5
Goods exports (excluding agriculture) 3
-2.0
4.2
4.6
-5.6
Services exports (excluding transportation) 3
1.5
0.1
4.4
-2.8
Number of employee posts in the private sector
 
 
0.1
-0.1
Rate of vacant employee posts out of total number of employed people in the business sector1
3.70
3.44
3.26
3.52
Building starts2
 
 
-3.6
-4.1
1 The rate of job vacancies at its actual level, seasonally adjusted and smoothed.
2 Six-month moving average.
3 Foreign trade indices are quantitative (in contrast to CBS monthly foreign trade indices).
 
For additional data and explanations please click here.
http://www.boi.org.il/en/Research/Pages/ind.aspx

[1] As part of the calculation of the Composite Index, advance estimates are made for components that are published by the Central Bureau of Statistics with a lag of one month.  More details are available at the link below.
[2] According to the Central Bureau of Statistics annual estimate.