The Israel Purchasing Managers Index compiled by Bank Hapoalim and the Israel Purchasing and Logistics Managers Association, fell by 3.7 points in May 2013 to 47.1 points, dropping below the 50-point dividing line indicating economic expansion from contraction.
Both the export demand component of the index and the output component fell below 50 points, while the domestic demand and employment components stayed below the threshold for the second consecutive month.
"There is significant weakness in the economy's growth engines," said Bank Hapoalim chief economist Prof. Leo Leiderman. He added that all of the index's components fell in May, except for supply times, and that both export demand and domestic demand pointed to economic contraction.
"We believe that the latest economic figures indicate a further slowing of the growth rate. Industrial exports fell again in May, there was also a slowdown in private consumption, which is expected to worsen due to the slump in consumer confidence," Liederman added.
The Israel Purchasing Managers Index belied improvements in the JPMorgan Global Purchasing Managers Index, which edged up to 50.6 points in May.
In a separate development, the Central Bureau of Statistics revised downward its growth estimate for the first quarter from an annualized 2.8% to 2.7%, and on Friday, it reported that the Consumer Price Index (CPI) rose by 0.1% in May, less than the analysts' consensus of a 0.3% gain, indicating a reduction in demand. Last week, "Globes" reported that the Consumer Confidence Index, compiled by Globes Research and pwc Israel, fell by over 20 points in response to the government's austerity plan.
Published by Globes [online], Israel business news - www.globes-online.com - on June 16, 2013
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