BoI: Signs of recovery in labor market

Industrial exports up 7.9% in September-November period.

February 11, 2010 06:44
2 minute read.
ship imports exports [illustrative]

illustrative-ship imports exports 311aj. (photo credit: Ariel Jerozolimski)


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Growth rates have not yet returned to their strong level before the global economic crisis, but the economic recovery picked up steam in September and began to affect the labor market, the Bank of Israel reported Wednesday.

“In the September to December period, exports expanded strongly, local demand increased and the first signs of the economic recovery spilling into the labor market appeared,” the central bank said in its report on economic developments in the September-December period.

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“At the same time though, economic developments in Israel will depend on the pace the world emerges out of the global recession,” the report said. “Massive government stimulus programs have ballooned deficits and public debt, while there are still challenges in the global financial system.”

For the first time in a year, the employment balance – hiring compared to layoffs – was positive in the fourth quarter. In addition, the number of hours per worker and salaries in nominal terms increased, while the number of job seekers and recipients of unemployment benefits declined, the report said.

Furthermore, for the first time in a year, expectations of employers regarding business activity and their workforce turned positive. The unemployment rate was 7.8 percent in the third quarter, and 7.4% in November, the report said.

Economic activity in the September-November period was led by growth in industrial exports, up 7.9% in seasonally adjusted terms compared with the previous three months, the report said.

The average number of workers in the industrial sector last January through November was 4.8% lower than the same period in 2008, the Israel Manufacturers Association reported Wednesday. Last October and November the number of workers rose 2%, the association said.


Industrial production rose 2.3% in the October-November period, the association said. That was still 6% lower in comparison with the rate at the outbreak of the global crisis in the second quarter of 2008, it said

Most industrial sectors grew in that period, but the traditional technology sector declined, the association said. Growth in the mixed-technology sector increased 5.6%, after falling 24% since the second quarter of 2008, and contributed about 50% to the overall rise in industrial production.

Production in the hi-tech sector grew 2% in real terms, after moderate growth of 0.1% in the third quarter of last year and a drop of 4% in the first two quarters of 2009, the association said.

Exports of goods and services, not including diamonds, rose 15.5% in annual terms from November through this January, down from an increase of 40.3% in the previous three months, the Central Bureau of Statistics reported Wednesday.

Exports of goods and services totalled $3.9 billion in January, out of which 74% were generated from industrial exports, 22% from diamond exports and 4% from agriculture exports, the bureau said. During the November-January period, imports of goods and services, not including diamonds, grew 35.5%, after expanding 38.7% in the previous three months, it said.

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