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The Israeli economy is still growing strongly, the Bank of Israel's research department reported yesterday.

The central bank's composite state-of-the-economy index for February rose 0.4% from its January level. The increase indicates that economic growth continued last month, reflected by increases in local demand and exports. Almost all components of the index showed increases, except for imports of consumer goods.

The central bank also updated the figures for January's economic growth from 0.4% to 0.5%.

A rival index, the Melnick index on the state of the economy, also rose in February - by 0.8%. According to Prof. Rafi Melnick of the Interdisciplinary Center in Herzliya, who prepared the index, the economy continues to grow strongly in early 2011.

Other indicators show industrial production is rising once again and has more than made up for the drop in August-September 2010.

Exports of services rose in February by 6.1%, following its 3.2% decline in January, reported the Bank of Israel. Imports of production inputs rose in February by 3.7%, after a 3.8% rise in January. Exports of goods increased in February by 4.5%, following a 0.6% rise in January. Imports of consumer goods fell by 5% in February, after increasing by 4.5% in January.

The composite state of the economy index is a cyclical indicator for examining the direction in which real economic activity is moving, in real time, said the central bank.

It is calculated from the monthly changes in seven components that reflect different aspects of real economic activity, i.e., the indexes of manufacturing production; imports of consumer goods; imports of production inputs; trade and services revenue; the number of employee jobs in the business sector; exports of goods (excluding agriculture, fuel, diamonds, and ships and aircraft ) and exports of services (tourism, computer and know-how, communications, insurance and other business services ).