The Bank Hapoalim and the Israeli Purchasing and Logistics Managers Association’s Purchasing Managers Index (PMI) for March 2012 fell by 1.8 percentage points to a level of 51.8 points. The level of the index continues to show expansion in manufacturing activity. The domestic new orders component expanded for the first time in 15months.
An upturn was also recorded in the employment component of the index. Notable for their negative performance were export new orders, which were again indicative of a contraction, raw material inventories, and industrial output.
Bank Hapoalim economists: The PMI for March continues to show expansion in manufacturing activity, albeit to a more modest extent. The domestic new orders component moved to expansion in March while a decrease was recorded in export new orders. Economic indicators for the first quarter were slightly more positive than those for the previous quarter, and this was particularly apparent in exports of goods. However, the present index shows that purchasing managers changed their assessments regarding exports, possible due to the continued downturn in Europe and the appreciation of the shekel.
The domestic new orders component rose in March. During the coming months, a series of budget cuts and tax hikes are expected. We believe that these developments will prove a major challenge to any continued expansion of domestic demand.
Bank Hapoalim cooperates with the Israeli Purchasing and Logistics Managers Association in the publication of data on the purchasing managers' index in Israel. Purchasing managers' indices are leading indices that can forecast changes in growth trends; these indices draw extensive global coverage and affect financial markets. Indices include the American ISM index, the European PMI index, and the global index published by JPMorgan Chase Bank.
The index is calculated based on the responses to six questions provided by purchasing managers at leading industrial companies in the Israeli economy. The methodology for computing the index is consistent with the prevalent methodology worldwide for the calculation of purchasing managers' indices. The Israeli index is included in the calculations of the European and global purchasing managers' indices. The Global Purchasing Managers Index published by JP Morgan continued to show an upturn in March and reached 51.2 points, a level almost exactly the same as that in the PMI for Israel. The PMI in the USA fell to a level of 51.3 points while the index in the Eurozone remained weak, reaching 46.8 points. However, thePMI rose in China, Japan and the UK.