I-Biz: Israel Business Information Services

Date

Subject

Period covered

Last data point

31.8.10

Unemployment rate (Labor Force Survey)

2^nd quarter, 2010

7.2% (Q1/10, SA)

31.8.10

Residential construction starts

2^nd quarter, 2010

+2.8% (QQ, SA)

5.9.10

Budget deficit (-)/surplus (+)

August 2010

-854 million shekels

7.9.10

Average real wage

June 2010

-0.1% (MM, trend)

14.9.10

Incoming tourists by air

August 2010

NC (MM, trend)

14.9.10

Foreign trade

August 2010

Exports*: +1.2% (MM, trend)

Imports**: +0.5% (MM, trend)

15.9.10

Consumer price index

August 2010

+0.5% (MM)

16.9.10

Purchasing Managers' Index

August 2010

48.0 (SA)

Legend

MM - compared to previous month

QQ - compared to previous Quarter

YY - compared to a year earlier

SA - based on seasonally edjusted data

Trend - based on trend data

NC - no change

Comments

Unemployment rate (Labor Force Survey)

Recent preliminary monthly data on the unemployment rate (through May 2010) show that the rate has gone below 7% - compared to 7.2% in the 1st quarter of 2010, so we forecast a rate of below 7% in Q2/2010.

Residential construction starts

The trend of residential construction starts has been positive since early 2009, though the trend increase has slowed in recent quarters – to just 2.8% in Q1/2010. We expect an accelerated trend increase in Q2/2010 as demand for housing continues to boom.

Budget deficit (-)/surplus (+)

The budget deficit in July was less than 1 billion shekels. The August deficit could remain as low as this and there could even be a small budget surplus in August.

Average real wage

The change in the average real wage turned negative again in May, showing that the overall improvement in the labor market situation is still not affecting wages to any great extent. However, we expect an increase in the average real wage in June, as unemployment continues to decline.

Incoming tourists by air

2010 is turning out to be the best year for incoming tourism in Israel's history and yet the monthly trend increase of incoming tourists by air shrank to zero in July. We forecast a return to a positive trend increase in August.

Foreign trade

After the trend of exports turned negative in June, July saw an improvement and a return to a positive trend (+1.2%). We forecast a continued increase in exports in August. There were similar recent developments in imports: a slowing trend increase through June, an improved increase in July (+0.5%). Here also, we expect the July improvement to continue in August.

Consumer price index

The 0.5% inflation of July was lower than most analysts expected (though it was within the I-Biz forecast range of 0.5-0.7% for July). Our forecast for August is inflation in the range of 0.2-0.4%.

Purchasing Managers' Index

The Purchasing Managers' Index remained below 50 (signifying contracting manufacturing activity) in July, for the 3rd consecutive month. In our estimation, the index could go back above 50 in August.