The Consumer Confidence Index, compiled by Globes Research and Kesselman and Kesselman - PricewaterhouseCoopers Israel, unexpectedly rose 5.7 points to 70.5 points in December 2008, after the index fell to a five-year low in November.
The uptick at the end of the year does not change the bleak overall picture for the year as a whole, when consumer confidence was most noted for its absence, and the Consumer Confidence Index fell 14.6 points.
The rise in the Consumer Confidence Index in December was due to a rise in the public's assessment of the current economic situation and in expectations of the economic situation and personal economic situation in six months. The rise can be attributed to positive assessments about the results of Operation Cast Lead as well as expectations that the February general elections will improve matters. The public's assessment about the future economic situation began to improve in September.
Despite the rise in the December Consumer Confidence Index, three-month moving trend figures are still bleak, especially regarding the current economic situation and expectations about the job market. The trend has been downward since July 2007, when the sub-prime mortgage crisis erupted in the US.
The Consumer Confidence Index began falling even before there were signs of a slowdown in the Israeli economy in the third quarter of 2008. More than a year ago, the public already sensed that the growth rate would slow and prepared mentally for the deteriorating current conditions.
An analysis by Globes Research found that the most of public's pessimism in 2008 concerned the current economic situation. In January 2008, 22% of the public said that the economic situation was good, and the proportion fell to 8% in December. At the same time, the proportion of respondents who said that the economic situation was poor rose from 42% in January to 60% in December.
Published by Globes [online], Israel business news - www.globes-online.com - on January 7, 2009
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