Israel's economy grew 4.8% in 2011 but is forecast to slow to 2.5-3% growth in 2012.
Israel's Purchasing Managers' Index (PMI) compiled by Bank Hapoalim and the Israel Purchasing and Logistics Managers Association, decreased by 3.2 points in June 2012, to 47.8 points, to fall below the 50 point level that separates manufacturing expansion from contraction.
The PMI had jumped to 53.2 points in April, crossing the 50-point threshold for the first time since last October, but the index has fallen for two straight months to move back below the 50 point mark.
Bank Hapoalim said in a statement that, "the Purchasing Managers Index for June fell below 50 points. All components of the index fell in June, except for supply times. The index has been fluctuating around the 50-point level, reflecting a slowly growing economy.
The domestic demand component has shown contraction for a long time, a figure which is in line with other indicators on consumption, such as the Trade and Services Proceeds Index, which has not risen for a year. "The export demand component fell by 6.4 points in June to 47.9 points.
Foreign trade figures published this month also show a sharp drop in industrial exports. We believe that the global situation is affecting the domestic economy, and the economy's growth rate continued to slow in the second quarter of 2012."
Israel's economy grew 4.8% in 2011 but is forecast to slow to 2.5-3% growth in 2012.
