Israel's purchasing power eroding
The Consumer Confidence Index rose by 5.3 points in January 2013 to 79.7 points.
The Consumer Confidence Index, compiled by Globes Research and pwc Israel, rose by 5.3 points in January 2013 to 79.7 points (baseline 100 = 1996), after falling by the same amount in December 2012, and rising by 2.3 points in November. The index rose against the backdrop of the elections for the 19th Knesset, and now that they are behind us, the index is back at its level in the fourth quarter of 2012, although below its level in the first quarter of last year.
In three-month moving trend figures, the Consumer Confidence Index rose by 0.8 points in January, after rising by 3.7 points in December and 4.9 points in November. In general, the index shows some recovery in consumer confidence from the low point reached in the third quarter of 2012. However, the January poll, conducted by the Smith Institute, was held before Governor of the Bank of Israel Prof. Stanley Fischer announced his resignation, and amidst reports on planned austerity measures.
The Consumer Confidence Index comprises three questions: "What in your opinion is the current state of the economy?"; "What will be the state of the economy in six months' time?"; and "What will be your personal economic situation in six months' time?"
For each question, "Globes" takes the proportion of optimists, deducts the proportion of pessimists, and thus obtain what is called "the net balance of optimism". If, for example, 40% of the respondents in the survey estimate that their situation will be better in six months' time, and 50% estimate that it will be worse, the net balance is ten percentage points.
In January, consumers' expectations about the economic situation in six months rose sharply, continuing the strong volatility in the public's expectations that has lasted for quite some time. The net balance of optimism rose by 10.5 points to minus 20.5 points in January, after falling 10.1 points in December and rising 10.6 points in November. The trend figure rose by 3.7 points in January, after rising 4.7 points in December and 7.5 points in November.
Consumers' expectations about their personal economic situation in three months also rose sharply in January. The net balance of optimism rose to 7.9 points from minus 1.4 points in December and plus 1.8 points in November. The trend figure rose by 1.5 points in January, after rising 2.2 points in December and 5.5 points in November. The steady rise in the trend figure in recent months and the strong gain in the current figure for January suggest the possibility of a turnaround, after months of heightened pessimism about the economy. The trend figure has risen 10.2 points since September.
However, in contrast to the responses about the future, the net balance of optimism about the current economic situation fell by 3.3 points in January to minus 33.2 points, after falling by 2.5 points in December and by 2.1 points in November. The drop in this component of the index also stood out in January compared with consumers' expectations about the future.
The trend figure for responses about the current economic situation fell by 2.7 points in January, after rising by 2.9 points in December and by 2 points in November. The figure fell to minus 30.2 points in January from minus 34.9 points in September.
The expanded Consumer Confidence Index, which includes a fourth question about the labor market, rose to 74.6 points in January from 68.2 points in December and 74.2 points in November, and compared with 75.1 points in January 2012. Favorable responses about the situation in the labor market in six months boosted the expanded index by more than the regular index in January.
Published by Globes [online], Israel business news - www.globes-online.com - on February 11, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
You comment was recieved and soon will be published.
Load more comments
Prices in Israel were 13% above the OECD average in 2013.
Record tourism in February
There were 244,000 visitor entries in February 2014, 5% more than in February 2013.
BoI: Home price rise risk has moderated
The interest rate cut for March was a 4-1 majority decision.
Gov't set to approve Israel-US tax pact
The economic social cabinet will soon approve the information sharing agreement with the US IRS.
Netanyahu: We won't abandon housing front
The prime minister promises to be as active on economic as on diplomatic problems.
Budget deficit lowest since August 2011
Tax collection rose 15% in February as the deficit fell to 2.7% of GDP.
2013 Knesset record for 'communications': NIS 71,908
Shas MK Avraham Michaeli was top; prime minister and finance minister spent low.
Average salary up slightly in 2013
The average monthly salary rose by only 1.1% after adjustments for purchasing power.
"Home prices driving tech workers overseas"
Leumi deputy CEO Daniel Tsiddon: The rise in home prices in high-tech areas in Israel is costing human capital.
IEC reform talks break down
The stumbling block was the workers' demand for an amnesty on salary excesses.
Flug reopens tussle over financial regulator
The Finance Ministry opposes Flug heading the new committee to supervise the financial system.
Charity begins at home in Israel
Individuals provide 71% of total charitable donations, companies 27%, and estates 2%.
Azrieli to fund Technion Tel Aviv campus
The campus will be called "Technion Campus in Sarona named for Azrieli."
18 Israelis make "Forbes" 2014 Billionaires List
Eyal Ofer is the richest Israeli followed by Idan Ofer and Stef Wertheimer.
BoI: Regional inequality up 84%
The Bank of Israel found the income gap between the center and the periphery is rising sharply.
US removes Israel from IP blacklist
Israel passed new legislation strengthening intellectual property rights on brand drugs.
Stanley Fischer slammed by BoI Governor predecessor
David Klein attributes most of Fischer's mistakes to "the American reality from which he drew much inspiration."
Bank of Israel releases samples of new NIS 50 note
The new NIS 50 banknote is green, bears a picture of the author Shaul Tchernichovsky.
"You can't teach entrepreneurship"
Angel investor Zohar Gilon relies on his own judgement rather than due diligence when selecting investments.
If Rose Fostanes played basketball
Reforms in regulations for foreign caregivers are welcome, but don't go far enough.
Antitrust Authority disappoints on gas competition
The only new company that will compete against Tamar and Leviathan will own less than 8% of Israel's proven gas reserves.
When innovation means a refrigerator
Jamshyd Godrej believes economic development in India must go hand in hand with environmental and social awareness.
Prof. Zvi Eckstein supports NIS 3.30-3.40/$ floor rate
The former deputy Bank of Israel Governor is the first senior figure from the financial system to advocate a floor rate.
2013 boom year for Israeli high-tech
In the first half of the year, there was a 52% rise in demand for mobile and web developers, and salaries are up as well.
Strong shekel forces Israeli manufacturers abroad
Israeli manufacturers tell "Globes" they are losing money due to the current strength of the shekel.
"Ending QE3 will harm the economy"
Prof. Richard Clarida will tell "Globes" Israel Business Conference that the main risk to the US economy is its political system.
Israel offers favorable tax regime for companies
"Globes" and Baker Tilly Israel accountants found Israel's tax benefits are among the most attractive in the West.
Slowdown will worsen
The vested interests that continue to claim that the economy is improving are deceiving the public, says Eyal Horowitz.
Can the US maintain growth after QE3?
Leading economists will discuss "The US: catch 22 the zero interest rate" at the "Globes" 2013 Israel Business Conference.