The rise in November's index reading was due primarily to a rise in manufacturing output
The Comprehensive State of the Economy Index compiled by the Bank of Israel rose 0.6% in November. The rise in the index continues a trend of several months, and the Bank of Israel said the trend shows that “the positive turnaround in the economy's operation continues”.
The index figures for both September and October were revised upward, from 0.5% to 0.6%. The rise in November's index reading was due primarily to a rise in manufacturing output, which rose 2.35 in October compared with September. The trade and services indices also rose, by 0.9% in October, following a fall of 0.85 in September.
The index is a synthetic cyclical indicator for examining the direction in which real economic activity is moving, in real time. It is calculated from the monthly changes in seven components that reflect different aspects of real economic activity, i.e., the indices of manufacturing production; imports of consumer goods; imports of production inputs; trade and services revenue; the number of employee posts in the business sector; exports of goods (excluding agriculture, fuel, diamonds, and ships and aircraft) and exports of services (tourism, computer and know-how, communications, insurance, and other business services).
The Index format consists of two elements: (1) the long-term growth rate (the middle line in the index), calculated from the linear combination of the trend of its components, and (2) the short-term movements of the index--the acceleration/slowdown relative to the long-term growth rate (growth cycles), calculated using a non-linear Markov-switching model.