Were We Right?
(for items in Forecasts of Upcoming Data -5.2-17.2.12)
"Were we right?" provides rapid, short initial reactions to important Israeli economic data published during recent weeks, allowing site users to keep updated. However, to monitor current economic developments in Israel in a more complete fashion, you need to subscribe to I-Biz current reports.

Average wage increase slows to 0.2% in November 2011

Our forecast was that the trend increase of the average real wage in November 2011 would slow compared to the 0.3% October increase. The November outcome was indeed a slower 0.2% increase.

Imports up, exports down in January 2012

Our foreign trade forecast for January 2012 was that both exports and imports would experience a continuing negative trend. This was indeed the outcome for exports which declined in January by a seasonally adjusted 6.3%, leading to an accelerated trend decline of -0.7%. In contrast, imports increased in January 2012 by a seasonally adjusted 4.5% - to their highest monthly level since August 2011, and the result was a positive trend increase of 0.4%.

January 2012 consumer confidence at same negative level as in December

The January 2012 Consumer Confidence Index remained at the same negative level as in the previous month (-20): Our forecast was that the index would remain strongly negative in January.

Business Trends Survey remains strongly negative in January 2012

As we had expected, the Business Trends Survey remained strongly negative in January 2012, though slightly less so than in December: -9.7% compared to -12.7%.

Incoming tourism drops in January 2012

Seasonally adjusted data on incoming tourism point to a 3.8% drop compared to December 2011 with the volume of tourism in the opening month of 2012 lower by 1.1% than in January 2011. This could be the first sign of our expectation that tourism in 2012 as a whole might be lower than in 2011 – as a result of the slower global growth – after increasing by just 0.6% in 2011 compared to 2010.

Zero inflation in January 2012

The Consumer Price Index in January 2012 remained at the same level as in December 2011. This zero inflation falls into our forecast January inflation range of -0.2-0%. It is interesting to note that housing prices increased somewhat in January (by 0.3%) after declining in the previous 3 months.

Purchasing Managers' January 2012 index lowest since early 2009

Our forecast for the January 2012 Purchasing Managers' Index was that it would remain strongly below 50 reflecting a significant contraction in manufacturing activity. The index in fact declined further from its December 2011 level – from 42.7 to 36.3 – reaching its lowest level April 2009, in the middle of the 2008-2009 recession.

GDP growth slows to 3.2% in Q4/11

The current slowdown in growth was confirmed by GDP data in the final quarter of 2011: GDP growth slowed to an annualized 3.2% compared to 3.8% in the previous quarter and 4.8% in 2010. These results matched our forecast of growth slowing to close to 3%. Private consumption declined by 4% in Q4, fixed asset investment exc. residential building declined by 3.1% and exports of goods and services declined by over 17%.