Economy contracts for 7th straight month

The Purchasing Managers Index rose last month but was still below the 50-point dividing line between expansion and contraction.

Israel's manufacturing activity contracted for the seventh consecutive month in December 2012. Although the Israel Purchasing Managers Index, compiled by Bank Hapoalim and the Israel Purchasing and Logistics Managers Association, rose to 44.1 points in December from 43.7 points in November, the index is still below the 50-point dividing line between economic expansion and contraction.

Although most of the index's components rose in December, they are still below the 50-point level. Domestic demand rose by 10.7 points to 47.8 points in December, and the jobs component rose 9.5 points to 49.8 points.

Bank Hapoalim said, "Manufacturing production, excluding high tech, is falling industrial exports have been falling for six months, and industrial employment is also declining. We believe that these effects have been affected by the global situation and by high uncertainty, which are preventing new investment and hiring."

The JPMorgan Global Purchasing Managers Index fell rose above 50 points to in December, to 50.2 points, indicating economic expansion, for the first time in six months. The US Purchasing Managers Index was over 50 points in December, but the Eurozone Composite Purchasing Managers Index, at 46 points, is still contracting. The China Purchasing Managers Index rose to 51.5 points in December, marking the second consecutive month of expansion.

Published by Globes [online], Israel business news - - on January 15, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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