Demand for workers jumps in August
Demand for workers reached a high in August as the number of unemployed dropped by 0.1 percent for the first time since the outbreak of the global economic crisis last year, the Israel National Employment Service reported on Monday.
"Unemployment figures for August, including data on the newly unemployed, point to first signs of a recovery. In comparison with the first quarter we are seeing an improvement in the number of unemployed month by month," said Yossi Farhi, director of the Israel National Employment Service.
"In March this year, 19,900 workers were laid off - compared with 15,100 in August. Trend figures show that the number of newly unemployed has come down by 8.3% to 22,000 compared with 24,000 in the beginning of the year."
However, Farhi cautioned that it was still premature to assess whether this was a turnaround in the unemployment figures.
The total number of unemployed who were without work for more than two days fell by 0.1% in August to 211,600 from 211,700 previously. The number of jobseekers rose by 1.7% in August to 228,600 compared with 224,700 in the previous month. After continued increase in the number of academics seeking work in recent months there was a decline of 1.7% in August from the previous month.
At the same time, though, there were little signs of improvement in the number of long-term unemployed. Out of the total number of jobseekers, 32.4% or 76,800 were registered as unemployed for more than 270 days over the last 12 months. During the month of August, the requests for workers reached a high of 25,300 compared with 23,300 in July and average monthly figures of 22,280 during 2008. The greatest demand for workers was for general workers in industrial sectors followed by security staff and sales and marketing personnel.
The rate of unemployment in July stood at 7.9% of the civilian labor force for the fourth month in a row, according to preliminary data published by the Central Bureau of Statistics last week. The CBS figures showed that the rate of unemployment was constant at a level of 7.9% in the months April to July. Since the outbreak of the global economic crisis the rate of unemployment increased gradually from 6.1% last September to 7.2% in January and 7.7% in March this year.
In a positive economic outlook on the Israeli economy, UBS Investment Bank on Monday revised its growth forecast upwards for this year to 0.3% from a contraction of 0.8%, and predicted a growth rate of 3% for 2010, up from 2.7% predicted previously. UBS forecasts for the unemployment rate to remain at 7.9% by year-end and to come down slightly to 7.8% in 2010.
"Israel's greatest source of strength is its impressive human capital endowment - simply put, its extensive pool of well-educated people. This helps to boost Israeli competitiveness in high-tech industries and has lifted Israel's per capita GDP to more than US$28,000 per year, one of the highest in EMEA [Europe, the Middle East and Africa]," said Reinhard Cluse, economist at UBS Investment Bank.
"In fact, from this perspective, it is doubtful whether Israel can still be classified as an 'emerging market.'
Despite recent positive economic data pointing to signs of a recovery, a survey conducted among 167 human resources managers by Lavie Timetech in cooperation with the Israel Manufacturers' Association found that 85% of Israeli companies have not yet lifted their hiring freeze, while a majority of managers said that they believe the economy is still in a crisis.
In addition, 76% of those surveyed this month reported that as a result of the economic crisis, working conditions and benefits such as employee gym, subsidized food vouchers and company cars have been cut. Out of those surveyed, 51% estimated that the rise in unemployment will come to a halt in the beginning of 2010, while 30% forecast that unemployment will increase and 19% forecast that it will decline.
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