Labor market tightness eases

ISRAEL - In Brief 23 Apr 2023 by Jonathan Katz

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Labor market tightness eases 24.4.23 Demand for workers declines Job vacancies in March declined to 131k from 135k in February and 152k one year ago (the highest level reached). The decline in job vacancies was witnessed not only in the high-tech sector, but in sales, construction, and clerical workers. The decline in demand for new workers is an indication of slowing economic growth and is supportive of softer wage/inflation pressure going forward. New home sales increase in February The number of new home sales increased by 14.4% m/m in February (seasonality adjusted), but is still down 31.6% y/y. Although the level of sales has declined significantly over the past year, this is following a sharp increase in 2022. The current level of sales is above that in 2020, but below 2021. We are not in a severe downturn yet in this sector, which would warrant a rate hike pause. The number of unsold new homes is up 22% y/y, which is expected to put further downward pressure on prices. Domestic demand continues to support production The PMI declined in March by 0.8 points to 51.5 points, still reflecting expansion for the fourth straight month in a row on the back of robust domestic demand (net positive domestic orders) while export orders have reflected contraction. The employment component declined to 45.3, and has reflected contraction for the past two months. So far, domestic demand has supported manufacturing although looking ahead, this is Institutions sell FX in February Israel institutions sold a net 3bn USD in February (following purchases of 4.5bn January) in order not to increase their FX exposure which automatically pushed higher due to higher equity valuations abroa...