According to an analysis by Lider Capital Markets economists for the macro data of 2020, growth in Israel was less affected than in other countries • Surprising growth data were recorded in the last quarter of the year: 6.3%
In the OECD, GDP fell by 6%
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Growth figures are surprisingly good and labor productivity has soared, according to a macro survey by Yonatan Katz and Lider Capital Markets Economists for 2020.
Katz and Lider economists examined the data of the Israeli economy according to the GDP per capita index, which recorded a contraction of 4.1% - a lower decrease than in most developed countries, and similar to the data in the US, Sweden and Ireland. 5%, in Australia at 5.4%, the OECD average stands at about 6%, and in New Zealand there was a decrease of 6.1% in GDP per capita.United Kingdom and Spain were hit the hardest economically, with a decline in GDP of 10.4% and 11.4% respectively. It should be noted that at the beginning of the crisis, the Bank of Israel also expected a sharper decline in GDP per capita - in the range of 5.5% -5%.
The relatively positive data are explained, among other things, by surprising growth in the last quarter of 6.3% on an annualized basis.
Even after deducting the increased purchase of vehicles at the end of 2020, which resulted from the increase in taxation on cars since last January, there was a growth of 2.7% at an annual rate.
In addition, the level of GDP in the last quarter of 2020 is less than half a percent lower than the corresponding period in 2019 - before the corona spread.
In contrast, the European average indicates declines of 5% or more in this index.
According to Lider economists, the relatively sharp decline in private consumption (4.9%) is also "misleading", as it stems from the sharp decline in travel abroad and consumption there. In addition, many closures prevented the consumption of many disrupted trading services, due to the closure of malls.
Last week, credit card purchases at restaurants jumped 27% and electrical equipment, clothing and footwear and furniture by 23%.
The trend of expansion in consumption is expected to continue as the trend of removing restrictions on activity continues.
Workplace mobility has also risen, compared with a stagnation in the OECD average on this index.
However, the CBS 'consumer confidence index indicates a decline in February compared to January, despite the gradual removal of the restrictions. The most noticeable decline was in the component "intention to make a large purchase in the coming year." Blider notes that "consumer caution may ease the pressure on demand With the removal of restrictions in the economy.
"We expected an improvement in the February survey against the background of the high vaccination rate and gradual opening in the economy, but it is likely that this effect will be felt in future surveys."
Given a record in productivity
Along with the severe crisis in the labor market, in the year of the corona, productivity jumped by 6.8% - a record high dramatically higher than in previous years.
For comparison, in the years 2019-2018 productivity increased by less than 3%, in 2017 by only 1.7% and in 2016 even negative productivity was recorded (decrease).
In 2020, the number of working hours decreased by about 10%, compared with a decrease of only 3.8% in business product.
"This means," explains Leader, "an improvement in long-term business sector profitability. Efficiency enables firms to absorb an increase in input prices without passing them on to the consumer."
In the current period, the volume of vacancies remained stable (and low) and stood at 60.5 thousand in January - a decrease of about 40% compared to January 2020, before the crisis.
The most prominent sector in the opposite trend - in the rise in vacancies - was high-tech.
However, Leader expects that economic indicators in the coming months will indicate a recovery, against the background of the removal of restrictions on activity.