Survey of Expectations
in Israeli Industry
as a Leading Forecasting Tool
1
October 2009
The Manufacturers' Association of Israel
The Israeli Economy , 2008
Facts & Figures
 GDP ($Billion)
 Population (Million)
 GDP per capita ($)
 Foreign Trade (% of GDP)
 Total Exports (% of GDP)
 Unemployment (Q2/09)
202
7.3
27,650
82%
40%
8.0%
The Israeli Industry
 Share of business sector
20%
 Industrial Sales ($Billion)
99
 Industrial Exports (% of sales)
41%
 Leading branches: Chemicals, Electronics & Food
2
The Manufacturers' Association of Israel
Survey of Expectations in Israeli Industry
Main Economic Parameters
production
Local Sales
Export
Shipments
Work- Force
Israeli Industry
Export prices
& profitability
Overseas activities
of Israeli companies
Financing
expenditure
Investments
3
The Manufacturers' Association of Israel
Survey of Expectations in Israeli Industry
Industrial production
30%
Weighted Net Balance
20%
10%
F
0%
Current Survey - Initial Findings (146 answers)
-10%
-20%
Total
Total
Weighted Net
Weighted
Net Balance
%
of reporting an increase minus %
Moving
average =of
3 Quarters
Decrease
Increase
Balance
of reporting a decrease, weighted according
to intensity
-30%
Q3/09
29%
38%
4.7%
-40%
Q4/09F
28%
40%
5.2%
Trend line
Observations
The Manufacturers' Association of Israel
Q4
Q2
Q3
Q1/09
Q4
Q3
Q1/08
Q2
Q4
Q3
Q1/07
Q2
Q4
Q3
Q2
Q4
Q1/06
Q3
Q2
Q1/05
Q3
Q4
Q2
Q1/04
Q3
Q4
Q2
Q4
Q2
Q3
Q1/03
4
Q1/02
-50%
According to ICBS Data
Industry Continued Growing during H1/08
Real change rates, S.A, each period against previous period
3.8%
2.6%
2.4%
1.5%
0.0%
-1.5%
-1.7%
-2.1%
-4.3%
Q3/07
Q4/07
Q1/08
Q2/08
Q3/08
Q4/08
5
The Manufacturers' Association of Israel
Q1/09
Apr-May Jun-Jul
09
09
Survey of Expectations in Israeli Industry
Export Shipments
2002 -2009
Export Shipments,
35%
Weighted Net Balance
25%
15%
F
5%
-5%
-15%
-25%
-35%
Observations
Trend line
The Manufacturers' Association of Israel
Q4
Q3
Q2
Q1/09
Q4
Q3
Q2
Q1/08
Q4
Q3
Q2
Q1/07
Q4
Q3
Q2
Q1/06
Q4
Q3
Q2
Q1/05
Q4
Q3
Q2
Q1/04
Q4
Q3
Q2
Q4
Q3
Q2
Q1/03
6
Q1/02
-45%
Survey of Expectations in Israeli Industry
Sales to the Domestic
Market, 2002 -2009
Local Sales
30%
Weighted Net Balance
20%
10%
F
0%
-10%
-20%
-30%
-40%
Trend line
Observations
The Manufacturers' Association of Israel
Q4
Q3
Q2
Q1/09
Q4
Q3
Q2
Q1/08
Q4
Q3
Q2
Q1/07
Q4
Q3
Q2
Q1/06
Q4
Q3
Q2
Q1/05
Q4
Q3
Q2
Q1/04
Q4
Q3
Q2
Q4
Q3
Q2
Q1/03
7
Q1/02
-50%
Survey of Expectations in Israeli Industry
Persons Employed
in Industry, 2002 -2009
Industrial Work-Force
20%
Weighted Net Balance
15%
10%
5%
F
0%
-5%
-10%
-15%
-20%
-25%
-30%
The Manufacturers' Association of Israel
Q4
Q3
Q2
Q1/09
Q4
Q3
Q2
Q1/08
Q4
Q3
Q2
Q1/07
Q4
Q3
Q2
Q1/06
Q4
Q3
Q2
Q1/05
Q4
Q3
Q2
Q1/04
Observations
Q4
Q3
Q2
Q1/03
Q4
Q2
Q1/02
8
Q3
Trend line
-35%
In H1/08 - Industrial Growth
Derived
a Single
Branch
Industrial Growth
in Firstfrom
Half of 2008
Derived mainly
from rapid growth
of Chemicals Branch
Real change rates, 2nd quarter of 2008 against last quarter of 2007
34%
This is a good example to a typical
situation in a small country, where
the survey can reflects more
clearly the real trend
-1%
Chemicals
Other branches
9
The Manufacturers' Association of Israel
The Survey’s ability to identify trend
changes in early stages
The timing gap in identifying trend changes in H1/08
According to
According to
the Survey:
official data:
April 2008
November 2008
Valuable timing gap
10
The Manufacturers' Association of Israel
High & positive Correlation Between the Survey
of Expectations in Industry & Official Data
A report made by an external research company
found out that:
“80% of the observations were able to predict
the accurate trend of changes in the index of
industrial production, export and employment
in correlation with the indexes published by the
ICBS”.
(Based on 1978-1995 data base).
11
The Manufacturers' Association of Israel
High & positive Correlation Between the Survey
of Expectations in Industry & Official Data
ICBS
Industrial output trend data, real change rates
each quarter compared to previous quarter
Survey Weighted
net balance
4%
30%
3%
20%
2%
10%
1%
Forecast
0%
0%
-1%
-10%
-2%
A positive correlation of 0.81
-20%
-3%
ICBS Data
-4%
-30%
Survey of Expectations
-40%
Q2/00
Q3/00
Q4/00
Q1/01
Q2/01
Q3/01
Q4/01
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
Q3/06
Q4/06
Q1/07
Q2/07
Q3/07
Q4/07
Q1/08
Q2/08
Q3/08
Q4/08
Q1/09
Q2/09
Q3/09
-5%
12
The Manufacturers' Association of Israel
Survey of Expectations in Israeli Industry
current survey - initial finding
Weighted Net Balance
Domestic Sales
-5%
-11%
-11%
5% 5%
0% 3%
1% 1%
-4%
Industrial production
Export Shipments
-4%
-9%
-13%
-13%
-21%
-34%
-34%
-40%
-45%
3/
4 / 09
09
(F
Q )
2/
08
Q
3/
08
Q
4/
08
Q
1/
09
Q
2/
09
Q
Q 3/0
4/ 9
09
(F
Q )
2/
08
Q
3/
08
Q
4/
08
Q
1/
09
Q
2/
09
Q
Q 3/0
4/ 9
09
(F
)
Q
Q
2/
09
Q
1/
09
Q
4/
08
Q
3/
08
Q
2/
08
-45%
Q
-39%
13
The Manufacturers' Association of Israel
Thank you
Daphna Aviram-Nitzan
Head of Economic Research Department
Manufacturers' Association of Israel
dafnan@industry.org.il
Tel. 972-3-5198807
Mobile: 972-50-7478111