Business in Brief: July 5

From 2005 to May 2011, food prices in Israel rose 12.7 percent, while in the 17-nation euro-bloc prices rose just 1.1%.

blackberries 311 (photo credit: Courtesy)
blackberries 311
(photo credit: Courtesy)
Demand for hi-tech workers soars
Demand for hi-tech workers increased 25 percent in the first half of 2011 compared with the first half of 2010, according to statistics published by placement company Jobinfo. “Companies have always preferred hiring by word of mouth, and there has even been an increase in this method this past quarter,” Jobinfo CEO Ilana Achimeir said in a report. “Today, some of the companies informed us that at least 40% of employees they have recently hired were found this way. Companies compensate their employees for finding new employees with expensive gadgets and bonuses that sometimes reach $2,000.”
Demand for new employees in the software and Internet sectors increased 10% in the first and second quarters of the year, up 60% compared with the corresponding quarters last year. The number of jobs in the IT sector was up 25%, mainly due to expanded company activity and the complexity of services or products offered. In the past, a large percentage of these positions were outsourced, but now companies prefer to fill them internally. There has been almost no change in salary in this sector. In the hardware sector, demand for electrical engineers was up 31%, an increase of 47% compared with the same quarter last year. Salaries have risen 7% to 10% in some of the positions, the report said.

Food prices much higher than Europe’s
A new study by the Knesset Research and Information Center confirms Globes’s findings that food in Israel is far more expensive than in Europe. The research found that over the past five and a half years Israeli food prices have risen far more than in Europe and the US. From 2005 to May 2011, food prices in Israel rose 12.7 percent, while in the 17-nation euro-bloc prices rose just 1.1%. The rise in prices in Israel was three and a half times higher on average than the 3.6% average price rise in food recorded in the 27-member states of the European Union.
Moreover, in a period when Israel saw a sharp rise in the consumer food-price index, there were some Western countries where the index fell. In Switzerland, for example, food prices fell an average of 4.7%, in Greece they fell 3.5%, while in Ireland, Spain, and Norway prices were eroded.
Food prices to the consumer rose not only compared with other countries, but also compared with the indices of agricultural inputs and the food industry output index. While these two indices rose by a similar amount, the food-prices index continued to rise sharply. The research found that over the five and a half years covered, the price of natural yogurt rose 46.2%, cottage cheese rose 41.3%, white cheese rose 32.3%, and sour cream and a carton of milk rose 15.5%.

RAND to advise on economic strategy
International research institute RAND Corporation has won the government tender for providing assistance and advice on formulating a long-term strategy for the Israeli economy, the Prime Minister’s Office announced Monday. RAND is a nonprofit organization that for the past 60 years has advised government agencies around the world on policy and strategy, including the US, the UK and China. “Under the conditions of the tender, RAND Corporation has linked up with Israeli consultancy Shaldor and will be part of the team for this project,” the Prime Minister’s Office said.
The maximum amount that the government budgeted for this contract was NIS 3.5 million, and the winner gave the government a certain discount on this sum, people familiar with the matter told Globes.
The RAND team will be led by Steven Popper, a senior RAND economist who has more than 20 years of experience in consultancy of this kind. His main expertise is in the changes that governments need to improve the effectiveness of their economic and social policies.