The Bank Hapoalim and the Israeli Purchasing and Logistics Managers Association’s Purchasing Managers Index (PMI) for October 2014 fell by 1.6 points to a level of 48.3 points, a level indicative of contraction in manufacturing activity.

A decrease was recorded in most components of the index. Industrial output and employment declined, but still show a trend of expansion. Dipping by 6.8 points, export new orders reverted to contraction.

The situation with domestic new orders was different, and these rose during the month to show expansion.

This was after four consecutive months of contraction. Bank Hapoalim economists noted that the level of the PMI showed contraction after having remained stable for a month.

The decline in the October index is attributed mainly to the decrease in export new orders and deterioration in the employment situation.

Recent indicators published by the Central Bureau of Statistics were mostly positive, reflecting the economy's recovery following the hostilities in Gaza.

Although GDP fell by 0.4% annualized in the third quarter, this was a relatively moderate decline in the view of the security situation at the time. This supports the assessment that the economy reverted to a growth pattern following the end of the hostilities.