The Consumer Confidence Index, compiled by Globes Research and pwc Israel, rose by 6.6 points in March 2013 to 80.8 points (baseline 1996 = 100 points), after falling 5.5 points in February and rising 5.3 points in January. This is the first that the index has risen above 80 points since June 2012.
The best word to describe Israel's consumer confidence is "volatile". This is also the case when examining the index's three-month moving average, which rose 2 points in March, after falling 1.8 points in February, and rising 0.8 points in January. Given the difficulty in identifying a direction, it is very hard to know whether there has been any turnaround in public confidence, and several months will be needed to see if it is confident in the new government's policies and the country's economic future.
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.
The public's uncertainty is clearly shown in its assessment of the economic situation in six months. The net balance of optimists rose by 14 points in March to minus 19.2 points, after falling by 12.6 points in February, and rising 10.5 points in January. In trend figures, the net balance of optimists rose by four points to minus 24.3 points, well above the level in the third quarter of 2012, but still below the level in the first quarter of last year, indicating the public's skepticism.
A breakdown of the public's assessment of the economic situation in six months shows that three groups are much more optimistic in March than they were in February: women, average income-earners, and people aged 30-49. The net balance of optimists among women rose by 19.4 points in March, compared with a 7.3 gain among men. The net balance of optimists among people describing themselves as average income-earners rose by 20.1 points in March, and the net balance rose by 15 points among respondents aged 30-49. The net balance of optimists among high income-earners rose by 19.7 points in March, but only by 4.1 point among below average income-earners.
Published by Globes [online], Israel business news - www.globes-online.com - on April 21, 2013
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