Transcript שקופית 1

The Israeli Economy
Strengths and Challenges
September 2012
The Israeli Economy – 2011
Facts & Figures
2
•
GDP ($ Billion)
244
•
Population (6/2012, Million)
7.9
•
GDP per capita ($)
31,385
•
Foreign Trade (% of GDP)
75%
•
Total Exports (% of GDP)
37%
•
Unemployment (7/12)
6.5%
•
Business Sector share in GDP
72%
•
Industry share of business sector
21%
The Manufacturers' Association of Israel
Main
Strengths & Opportunities
Towards 2013
3
The Manufacturers' Association of
Strengths & Opportunities
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•
4
The Resilience of Israeli Economy during 2008/9 Crisis
Strong starting point towards 2012
Export oriented growth
High-tech oriented growth
World leadership in civilian R&D investments
Conservative approach
Responsible fiscal policy
Diversion of Trade towards developing countries
Attractive Corporate tax
The Manufacturers' Association of Israel
Positive Growth in Israel Vs.
Regression in Most Developed Countries
Developed and selected major emerging market countries,
Real GDP growth, 2009
10%
8%
6%
4%
2%
0.8%
0%
-2%
-4%
-6%
Finland
Russia
Ireland
Mexico
Japan
Sweden
Italy
UK
Germany
Turkey
Denmark
Netherlands
Austria
Spain
Belgium
Portugal
USA
Canada
France
Greece
Switzerland
South Africa
New Zealand
Norway
Brazil
Saudi
Israel
Australia
Poland
India
China
-8%
5
Source: IMF October 2010
The Manufacturers' Association of Israel
Relatively Moderate Regression in
Israeli Industry during 2008/9 Crisis
Real Industrial Output Change, 2009 compared to 2008
4%
-1%
-4% -4%
-5%
-6%
-9%
-10%-10%
-11% -11%
-12% -12%
-15%
-16%
-17% -18%
-18%
-21%
Source: OECD, CBS & MAI Economic Research Department
6
The Manufacturers' Association of Israel
Relatively Moderate Increase in
Real Estate Prices Before 2008/9 Crisis
Nominal Change in Average Apartment Price, 1997-2007
Source: Psagot Investment House.
7
The Manufacturers' Association of
Relatively moderate Dismissals
During 2008/9 Global Crisis
Employee
Jobs
in Business
Sector
Employee
Jobs
in the
Business Sector
Change Rates, Each period Compared to the Parallel Period in a Previous Year
5.4%
4.9%
4.5% 4.3% 4.5% 4.3%
4.2%
3.3%
2.8%
0.9%
0.2%
-0.7%
-1.7% -1.8%
8
The Manufacturers' Association of Israel
4.1% 4.3%
2.8%
2.4%
1.7%
Employment Flexibility During 2008/9 Crisis
Efficiency Measures Taken by Industrial Companies
Towards all Employees, Excluding Management
Reducing Overtime
80%
At the expense of
employees' vacation days
Unpayment vacation
30%
7%
At the expense of employees
vacation days
while lowering wages
Reducing job scopes while
lowering wages
Concentrated
vacation
15%
6%
Shortened
workweek
11%
Source: MAI Economic Research Department, Survey - February 2009
9
The Manufacturers' Association of
Strengths & Opportunities
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10
The Resilience of Israeli Economy during 2008/9 Crisis
Strong starting point towards 2012
Export oriented growth
High-tech oriented growth
World leadership in civilian R&D investments
Conservative approach
Responsible fiscal policy
Diversion of Trade towards developing countries
Attractive Corporate tax
The Manufacturers' Association of Israel
Rapid Growth in Israeli Economy
Real Annual
Changes
2004
- 2011
7.0%
6.8%
5.7%
5.3%
5.1%
4.8% 4.8%
5.0%
4.2%
6.2%
5.8%
5.3%
5.9%
4.7%
3.8%
3.4%
3.3%
3.4%
2.9% 2.8%
2.4%
0.8%
0.3%
-0.9%
GDP
11
GDP per Capita
The Manufacturers' Association of Israel
Business Sector GDP
Independent of Outside Funding
A Surplus
in The Balance
of Payments
A Decade
of Current
AccountCurrent
SurplusAccount
As Percentage of GDP
5.0%
3.6%
3.1%
2.6%
2.9%
2.9%
1.7%
0.3%
0.5%
0.1% 0%
-0.9%
-1.8%
-2.2%
-4.9%
0.8%
-1.6%
The combination of a continual surplus in the current
account and the large amount of foreign currency
reserves, enable Israel to provide its import needs
without dependence on external financing.
Source: ICBS, 2012 Forecast – MAI’s Economist Research department.
12
The Manufacturers' Association of
Companies & Individuals Lend Money
*‫נטו‬
:4 ‫תרשים‬
to‫החיצוני‬
the‫החוב‬World
‫ המשק מלווה נטו לחו"ל‬: )-( ‫סימן‬
Net External Debt*
20
(-) Sign: the economy is a net lender abroad
10
Billions
$‫דולר‬
‫מיליארדי‬
0
-10
-20
-30
-40
-50
-60
-70
99 000 001 002 003 004 005 006 007 008 009 009 009 010 010 010 010 011 011 011 011
9
1
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
3
4
1
2
3
4
1
2
3
4
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
‫(ללא‬
‫במכשירי חוב‬
‫בחו"ל‬in‫המשק‬
‫החוב החיצוני בניכוי‬
: ‫*חוב חיצוני נטו‬
Net external debt: External.)‫מניות‬
debt ‫הון‬
less
foreign
assets
debt‫נכסי‬
instruments
(excluding
share capital).
Source: Interdisciplinary Center (IDC) Herzliya.
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The Manufacturers' Association of Israel
Strengths & Opportunities
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The Resilience of Israeli Economy during 2008/9 Crisis
Strong starting point towards 2012
Export oriented growth
High-tech oriented growth
World leadership in civilian R&D investments
Conservative approach
Responsible fiscal policy
Diversion of Trade towards developing countries
Attractive Corporate tax
14
The Manufacturers' Association of Israel
Export
Oriented
Growth
Export Oriented Growth in Industry
Real Cumulative Rate of Change, Since 1998
146%
Industrial Exports
134%
120%
Industrial Production
Export = 42%
of Sales
102%
80%
62%
Export = 31%
of Sales
54%
41%
0%
7%
1%
15
102%
42%
34%
12%
27%
4%
31%
4%
26%
11%
15%
6%
The Manufacturers' Association of Israel
44%
32%
33%
47%
Strengths & Opportunities
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The Resilience of Israeli Economy during 2008/9 Crisis
Strong starting point towards 2012
Export oriented growth
High-tech oriented growth
World leadership in civilian R&D investments
Conservative approach
Responsible fiscal policy
Diversion of Trade towards developing countries
Attractive Corporate tax
16
The Manufacturers' Association of Israel
The High Tech Sector Contribution to
Industrial
Growth to Industrial
The High Tech
Sector Contribution
2004in
–2011
Growth
2004-2011
As Percentage of Total Growth
74%
73%
63%
To Industrial Output
17
To Employment in
Industry
The Manufacturers' Association of Israel
To Industrial Export
The Israeli Industry is Undergoing
Long term Structural Changes
Production Distribution
32%
Employment Distribution
24%
43%
High
Tech
Mixed
Tech
39%
28%
39%
39%
35%
29%
18
Low
Tech
21%
The Manufacturers' Association of Israel
37%
33%
High Share of ICT in the Business
ICT Sector GDP, Out ofSector
The Business Sector GDP 2008
ICT= Information & Communications Technologies, 2008
2010 15.7%
16.1
13.9
13.0
12.2
10.4
9.9 9.6
9.0 9.0 8.8 8.8
8.2 8.2 8.1 7.8
7.2 7.1 7.1
6.7 6.4 6.3
6.2 5.9 5.8 5.7
5.7
5.0
3.7
Source: Israeli CBS
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The Manufacturers' Association of
Strengths & Opportunities
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•
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The Resilience of Israeli Economy during 2008/9 Crisis
Strong starting point towards 2012
Export oriented growth
High-tech oriented growth
World leadership in civilian R&D investments
Conservative approach
Responsible fiscal policy
Diversion of Trade towards developing countries
Attractive Corporate tax
20
The Manufacturers' Association of Israel
World Leadership in Civilian R&D
Israel is The World Investments
Leader in Civilian R&D Investment
As Percentage of GDP, 20
4.3%
3.9%
4. %
3.6%
3.3% 3.3%
2.7%
2.5%
201
2.2%
2.0%
1.6%
1.3% 1.3%
Source: Israeli CBS
21
1.8%
The Manufacturers' Association of Israel
1.1%
Global R&D and Innovation Center
22
The Manufacturers' Association of Israel
Strengths & Opportunities
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•
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The Resilience of Israeli Economy during 2008/9 Crisis
Strong starting point towards 2012
Export oriented growth
High-tech oriented growth
World leadership in civilian R&D investments
Conservative approach
Responsible fiscal policy
Diversion of Trade towards developing countries
Attractive Corporate tax
23
The Manufacturers' Association of Israel
High Private Saving Rate in Israel
Househld saving rates - Percentage of disposable household income, 2011
Israel
Switzerland
Belgium
Germany
Australia
Sweden
Ireland
Norway
Austria
Netherlands
Slovak Republic
United States
Italy
Czech Republic
Poland
Canada
Korea
Hungary
Japan
Finland
Estonia
New Zealand
Source: OECD & BOI
24
13.0
11.4
11.2
11.0
9.7
9.7
9.4
8.0
7.5
5.5
5.4
4.7
4.5
4.2
3.9
3.8
3.1
3.0
2.9
2.2
1.4
0.8
The Manufacturers' Association of Israel
Strengths & Opportunities
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•
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The Resilience of Israeli Economy during 2008/9 Crisis
Strong starting point towards 2012
Export oriented growth
High-tech oriented growth
World leadership in civilian R&D investments
Conservative approach
Responsible fiscal policy
Diversion of Trade towards developing countries
Attractive Corporate tax
25
The Manufacturers' Association of Israel
Relatively Low Government
DeficitDeficit
in Israel
Israel’s Government
is Relatively Low
11.7%
As Percent of GDP, 2012
10.0%
8.1% 8.0%
6.0%
4.6% 4.5% 4.5%
3.7%
3.4% 2.9%
2.5% 2.4%
1.4%
0.8%
0.1%
Source: IMF
Source:
IMF, Caesarea Forum, The Israeli Democracy Institute (IDI).
26
The Manufacturers' Association of Israel
Continuous
Reduction of Public Debt Ratio
Reduction of Public Debt Ratio
Public Debt as Percentage of GDP
99.3
97.7
93.7
84.7
78.1
77.1
79.5
76.1
74.2
74.2
2012F
Source: Bank of Israel.
27
The Manufacturers' Association of Israel
Relatively
Low
Relatively
LowPublic
Public DebtDebt
Ratio Ratio
As percent of GDP, 2011
229.8%
160.8%
120.1%
106.8%105.0%102.9%
98.5%
86.3% 82.5%
81.5% 74.2%
72.2% 68.5%
66.2%
55.4%
48.6% 46.4%
35.5%
source: IMF
Source:
IMF, Caesarea Forum, The Israeli Democracy Institute (IDI).
28
The Manufacturers' Association of Israel
Israel Credit Rating
•
September 2011 –
S&P raised Israel’s credit ratings to A+ from A.
S&P mentioned that their ratings on Israel are
supported by their view of its "prosperous and
resilient economy, strong institutions, ongoing fiscal
consolidation, and robust external performance."
•
December 2011 –
Moody’s affirms Israel’s A1 rating.
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The Manufacturers' Association of Israel
Strengths & Opportunities
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•
•
•
•
•
•
•
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The Resilience of Israeli Economy during 2008/9 Crisis
Strong starting point towards 2012
Export oriented growth
High-tech oriented growth
World leadership in civilian R&D investments
Conservative approach
Responsible fiscal policy
Diversion of Trade towards developing countries
Attractive Corporate tax
30
The Manufacturers' Association of Israel
Diversion of Trade to Asian Countries
Distribution of Israel's export of goods by trading blocks,
Excluding Diamonds
34%
32%
31%
28%
24% 24%
24%
23%
23%
22%
19%
15%
Other
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Asia
US
Jan.- July 2012
The Manufacturers' Association of Israel
EU
Strengths & Opportunities
•
•
•
•
•
•
•
•
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The Resilience of Israeli Economy during 2008/9 Crisis
Strong starting point towards 2012
Export oriented growth
High-tech oriented growth
World leadership in civilian R&D investments
Conservative approach
Responsible fiscal policy
Diversion of Trade towards developing countries
Attractive Corporate tax
32
The Manufacturers' Association of Israel
Corporate Tax
Corporate
Tax
2012
Japan
US
France
Belgium
Portugal
Germany
Australia
Spain
Norway
Italy
Canada
OECD average *
Israel
Austria
Netherlands
Finland
UK
Iceland
Greece
Chile
Ireland
Source: OECD.
* Simple average of member countries.
33
40%
39%
34%
34%
32%
30%
30%
30%
28%
28%
26%
25%
25%
25%
25%
25%
24%
20%
20%
17%
13% INDUSTRIAL COMPANIES WITH EXPORT CAPABILITY
2011-12: 10% - 15%
2013-14: 7% - 12.5%
2015+: 6% - 12%
The Manufacturers' Association of Israel
Main
Challenges Towards 2013
34
The Manufacturers' Association of
Main Challenges Towards 2013
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•
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•
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A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
Slowdown in World Trade
Volume of World Trade
Annual change, trade in goods
14.1%
13.3%
10.8%
6.3%
3.7%
7.5%
8.6%
7.1%
5.8%
5.6%
4.0%
2.8%
-0.3%
-12.0%
2012 2013
Frcst Frcst
Source: The Economist, 17/4/12
36
The Manufacturers' Association of Israel
Unbalanced Growth Around the
World
Growth
Forecast
Annual GDP growth
7.8%
7.5%
7.1%
5.3%
2.8%
1.9%
4.5%
4.2%
3.4%
2.3%
1.7%2.0%
1.5%
2.4%
1.5%
0.7%
-0.3%
Developing
Asia
Central and
Eastern
Europe
Latin
America
United
States
2012 Forecast
Euro Area
2013 Forecast
Source: IMF World Economic Outlook update, July 2012.
37
The Manufacturers' Association of Israel
-0.7%
Japan
Main Challenges Towards 2013
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•
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•
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•
•
38
A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
Import Penetration
Goods and services import volume as a percentage of total final expenditure, constant prices
2011
44% 43%
41%
34%
32%
31% 30% 30%
28%
26%
24% 24% 24% 23%
23% 23% 23% 22%
22% 21%
14%
10%
Source: OECD
39
The Manufacturers' Association of Israel
Main Challenges Towards 2013
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•
•
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40
A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
Slowdown in Israeli Economy
Economic Forecast 2013
Real Annual Changes
5.8%
5.3%
4.8%
4.8%
3.1%
3.1%
2.6%
2.6%
GDP
Business Sector GDP
2012 Est.
2013 Frcst.
41
The Manufacturers' Association of Israel
Main Challenges Towards 2013
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•
•
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•
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42
A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
Increasing Costs
Controlled
by thebyGovernment
Increasing Costs Controlled
the Government
Cumulative Change 2012/13 *
44.6%
37.2%
5.6%
Property Tax
Water for industry
Electricity Prices
* Business Economics Department Projections for 2012/3.
environmental
protection laws initiatives-> increased costs
World Energy Prices: upside risks (sanctions on Iran)
* Business Economics Department Projections for 2012/3.
43
The Manufacturers' Association of Israel
Main Challenges Towards 2013
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•
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44
A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
An Additional Wage Updates are
Expected
due to the Minimum Wage Update
• January 2011
• April 2011 (By law)
• July 2011
• October 2012
3,850 NIS
3,890 NIS
4,100 NIS (By law in 4/12)
4,300 NIS (By law in 4/13)
Contractor workers agreement
(Differential minimum wage/ Equal conditions??)
45
The Manufacturers' Association of Israel
Difficulty in Recruiting Professional
for the
Industry
DifficultyEmployees
in Recruiting Professional
Employees
for the Industry
(Percent
of Industrialists
Reporting
of Difficulties,
of Expectations
in Industry)
According
to preliminary
findings
of a surveySurvey
of expectations
in industry
83%
20%
81%
75%
75% 73%
73%
69%
11% 18%
17%
31%
33% 27%
31% 18%
77% 78% 78%
23%
25% 24% 26% 27% 28% 20%
24% 26%
26% 25%
52%
29%
84%
%
66%
61%
%
82% 82%
42%36%
27%
23%
27% 24%
33% 35% 30% 26% 32% 35% 28% 26%
23%
16%
34%
29% 30%
11%
25%
17%
16%
9%
8%
29% 25%
23% 23% 20% 27%
23% 26% 26%
21%
18%
16%
Q4/07Q1/08Q2/08Q3/08Q4/08Q1/09Q2/09Q3/09Q4/09Q1/10Q2/10Q3/10Q4/10Q1/11 Q2/11 Q3/11 Q4/11 Q1/12Q2/12
Little Difficulty
46
Medium Difficulty
The Manufacturers' Association of Israel
Hard Difficulty
Main Challenges Towards 2013
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•
•
•
•
•
•
•
•
•
47
A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
Credit Crunch in Industry ??
Survey
of expectations
- creditindifficulties
According
to survey of expectations
industry
Difficulty maintaining existing credit lines
Difficulty in raising new credit
71%
67%
58%
55% 54%
52%
51%
50%
48%
48%
46%
45%
44%43%
42%
38%
65%
56%
53%
51%
51%
51%
48%
48%
48%
48%
46%
40%
Source: Survey of expectations in Industry, July 2012, 176 respondents.
48
The Manufacturers' Association of Israel
Main Challenges Towards 2013
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•
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•
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49
A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
Israeli Government Bureaucracy:
TheMajor
most problematic
factorsfor
for doing
business
A
Obstacle
Businesses
Inefficient government bureaucracy
23.2
Access to financing
13.9
Tax rates
11.5
Restrictive labor regulations
9.6
Inadequately educated workforce
6.5
Inadequate supply of infrastructure
6.5
Tax regulations
5.8
Policy instability
5.6
Corruption
4.6
Poor work ethic in national labor force
3.5
Foreign currency regulations
3.1
Inflation
1.9
Government instability/coups
1.9
Poor public health
1.0
Insufficient capacity to innovate
1.0
Crime and theft
0.3
0
5
10
15
20
25
Source: The Global Competitiveness Report of World Economic Forum (WEF),
50 the 2012/13 report covers 144 economies.
The Manufacturers' Association of Israel
Ease ofEase
Doing
Business 2012
of Doing Business Rank 2012
Singapore
Hong Kong
New Zealand
USA
Denmark
UK
Korea
Ireland
Finland
Canada
Japan
France
Austria
Israel
South Africa
1
2
3
4
5
7
8
10
11
13
20
29
32
34
35
87
Italy
Source: The World Bank. 2012 report covers 183 economies.
51
The Manufacturers' Association of Israel
Main Challenges Towards 2013
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52
A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
Government’s
Budgetary
Deficit
Government's Budgetary Deficit
As percent of GDP
As Percent of GDP
Target Deficit
Actual Deficit
6.0%
5.2%
4.0%
3.6% 3.4%
5.5%
3.7%
3.0%
3.6%
3.3%
3.0%
2.9%
2.9%
3.5%
3.0%
2.2%
1.8%
1.6%
1.0%
1.5%
1.5%
0%
2012
Frcst.
53
The Manufacturers' Association of Israel
2013
Frcst.
Main Challenges Towards 2013
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•
•
•
•
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•
54
A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
Shifting Production Lines Abroad
Rate of companies with manufacturing activity abroad
In about two years , 53% of companies will have a manufacturing activity abroad.
Today, about 26% of companies have manufacturing activity abroad.
29%
19%
Q4/09
20%
Q1/10
22%
23%
24%
Q2/10
Q3/10
Q4/10
26%
Q1/11
Source: Survey of expectations in Industry, Economics division, MAI.
55
The Manufacturers' Association of Israel
Q3/11
Q4/11
53%
Main Challenges Towards 2013
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•
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A Global economy slowdown
High Import Penetration
A slowdown in Israeli Economy
Increasing Costs Controlled by the Government
Wage pressure
Credit crunch in industry
Government bureaucracy
Uncertain fiscal policy
Off-shoring
Geopolitical instability
The Manufacturers' Association of Israel
Geopolitical instability
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The Manufacturers' Association of Israel