The Bank Hapoalim and Purchasing Managers' Association's PMI for December 2011 fell by 1.1 percentage points to a level of 42.7 points, to stay well below the 50 point level that separates manufacturing expansion from contraction.
Domestic new orders dipped by 10.2 percentage points, making for 20 percentage point decrease in the last two months. Most index components declined during the month, including raw-materials prices which showed a downturn for these two consecutive month.
Bank Hapoalim noted that in December 2010. 'The final months of the year showed a downward trend in the PMI, and December's level was the lowest since the middle of 2009.
Most of the index's components are below 50 points,' the report said on Monday. 'The manufacturing sector is more sensitive than others to global developments and we estimate that the declining trend in the PMI is tied to the great uncertainty in relation to the global economy and the concerns of purchasing managers in manufacturing from implications of the crisis in Europe on the sector,' it added.
After remaining below 50 points for three months, in December the JPMorgan Global Purchasing Managers Index rose above that level and reached 50.8 points. The index in the USA was again notably favorable and reached a level of 53.9 points. The index rose in most of the eurozone countries as well, but was still indicative of a contraction in most cases.
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.
