The Israeli economy continues to grow, though at a slower pace in recent years - despite the global credit crisis and the slowdown in the U.S. The proof is the Bank of Israel's composite state-of-the-economy index, released on Friday, which rose 0.1% in April.

The central bank noted the increase, though small and slower than in previous months, indicates continued economic expansion.

The increase was led by higher industrial production in April as well as higher revenues in commerce and services. On the other hand, exports of goods were down.

At the same time the Bank of Israel also updated its February and March index numbers, saying they were actually higher than initially reported. In February the index rose 0.8%, compared to the previously announced 0.4%, and the March index was actually up 0.6%, as opposed to the reported 0.55%.

The index is meant to measure in real time the direction the economy is moving. It includes monthly changes in five components that reflect different aspects of real economic activity: manufacturing production; imports, excluding capital goods; trade and services revenue; the number of jobs in the business sector; and goods exports (excluding agriculture, fuel, diamonds, and ships and aircraft).

The index was revised in 2006 to include services exports: tourism and other services, software, R&D, consulting, and real estate brokerage. It is calculated by the central bank's Research Department.

Despite the overall numbers and previous pessimistic forecasts, industrial production - one of the most important forces in the Israeli economy - is still puffing away.

Industrial production rose 9%, on an annual basis, in the first quarter of 2008, as compared to the same period of 2007.

This figure is twice the increase for all of last year, which was 4.5%. In the last quarter of 2007, industrial production was up even more, to 10.7%.

The causes for the steep rise are increased productivity, a rise of 1.1% in industrial employment, and in particular an increase in orders from overseas.

High-tech industry, which makes up almost 50% of total Israeli industrial production, rose for the first quarter by 11% in annual terms, after an only 4.4% increase for all of 2007.

However, the figures for traditional industries were much worse, showing a drop of 1.5% in output.