The composite state-of-the-economy index rose 1.1 percent in July on the back of strong growth in exports and imports of goods, which was partially offset by declines in the manufacturing production and services exports indices. "The current rise in the index reflects a considerable upsurge in the sales revenue index and in the commerce and services industries, and marked rises in the goods imports and exports indices," the Bank of Israel said in its monthly report released Tuesday, noting that the growth testified to the continued rapid expansion of economic activity. The central bank also readjusted the index data for the May-June period upward from an increase of 0.7% to 1%, following sharp readjustments in data from the Central Bureau of Statistics in the goods imports and exports data for May and June. The manufacturing production index dropped in June by 2.5%, following its rise of 2.5% in May, while the commerce and services revenue index went gained 3.3% in June following its 1.2% rise in May. The goods exports index surged by 8.1% in July, following its 6.5% fall in June, while the imports index rose by 10% in July, following its 0.7% decline in June. Meanwhile, the "Melnick Index," a monthly measure of the state of the economy by Prof. Rafi Melnick, published by the Interdisciplinary Center Herzilya, rose by 0.8% in July, driven by a rapid growth rate in domestic demand and, in particular, private consumption. The Melnick Index added support to the central bank's statement that the growth momentum of the economy was continuing, but at the same time, Prof. Melnick warned that the data also revealed worrying signals regarding the decline in the manufacturing production index during the month of June. "Over the past nine months, manufacturing production did not expand," said Prof. Melnick, dean of the Lauder School of Government, Diplomacy and Strategy at the IDC. "This development is worrying since manufacturing production is the basis for exports in the economy and its slowdown is poised to curb the momentum in the economy in the second half of 2007."