It may have been the shortest month on the calendar, but February was certainly long on economic news, including a 40-year low in the State’s unemployment. Elsewhere, over a dozen Israeli startups moved to the head of the class, and Google is teaming up with the Government to send low-tech companies back to school. Plus, the Ministry of Economy and Industry is getting desperate for more female entrepreneurs, and our trading desk sees opportunity in volatility. Ready to catch up on what you may have missed? Then read on and be enriched!
From the IsraTransfer Trading Desk
It was somewhat of a misleading week to close out the month of February considering the lighter trading (as was to be expected) corresponding to the Purim holiday. As such, we attribute some of the exaggerated moves of early last week to thinner trading volumes, however, the markets did receive a fundamental shock on Friday with the announcement of President Trump’s plan to impose tariffs on both foreign aluminum and steel. The news sparked fears of a potential impending international trade war that sent the US dollar lower, along with the USD/NIS exchange rate, GBP/NIS, EUR/NIS, and others.
Furthermore, the development was hardly helpful in stemming the tide of stronger shekel momentum, so we would not be surprised to see a continuation going forward. Additionally, lighter trading (and presumed exaggerated results) are on the docket again in the month of March with the upcoming Pesach holiday and its accompanying chol hamoed days, meaning those looking to exchange may want to stay on the alert and take advantage of “up days” in the exchange rates, as we still see the interim trend in the shekel remaining stronger.
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Israel Economy Snapshot
Some things never change, especially when it comes to Israel’s short-term interest rates, as Bank of Israel elected to not to make any changes yet again, keeping it steady at 0.10%, citing a continuation of a low-inflation environment, as well as monetary policy in other major global economies. Although the rate has not changed since February 2015, Bank of Israel economists do believe inflation will reach 1.10% percent by the end of 2018, resulting in a 15 basis point rate hike to 0.25% by year-end.
Elsewhere, after a few rocky weeks at the Central Bureau of Statistics, the agency was happy to share some good news in its latest unemployment figures. The reporting showed the rate falling to a new low 3.70% in January from 4.0% in the month prior, marking the first time the figure as been this low since 1970s. In what could best be described as very groovy development, Israel’s workforce of those ages fifteen and older now stands at over 3.8 million strong!
When it comes to Israeli entrepreneurship, it appears a lot of work remains to be done – literally. In a troubling study conducted by Israel’s Economy Ministry, while over 40% of women polled expressed a desire to launch their own venture, only slightly more than a quarter of them actually do. Although in recent years women have achieved mightily in positions of salaried corporate managers, their participation in launching their own endeavors is glaringly apparent. Among the main culprits cited for the lack of follow through included a general lack of financial knowledge, as well as a deficiency of self-marketing expertise. As Economy Minister, Eli Cohen, has stressed, women’s participation in entrepreneurship is “essential for economic growth,” so hopefully with heightened awareness, including more female CEO success stories, the days of the current gender gap are numbered.
Israel is truly living up to its billing as one of the world’s most innovative nations with last week’s announcement that fifteen Holy Land-based startups have been named to Fast Company’s ‘World’s Most Innovative’ companies of 2018, citing their contributions to business, industry, and culture to name a few. The list, comprised of 350 honorees, was narrowed down by over thirty Fast Company editors from thousands of nominees across the biotechnology, energy, transportation sectors, and more.
Among those named to the list include popular headline-makers Fiverr, WeWork, Houzz, and of course, Waze, which took top prize in the transportation category. A complete list of Israel’s winners can be found here. Congrats to all our country’s champions, and we certainly look forward to the addition of even more homegrown talent on next year’s list.
Israel’s New Lean, Mean, Productivity Machines
Finally, improving Israel’s economic productivity isn’t exclusive to Israel’s revolutionary high-tech companies either, as the Ministry of Finance, the Manufacturer’s Association of Israel, and Google are teaming up to help the State’s small and medium-sized manufactures to run more effectively. As part of the 3 million shekel program, companies with sales of up to 100 million shekels, or that employ up to 100 workers will be offered participation in a workshop for senior management on how to improve productivity. Additional benefits include a data analytics course for company workers, and even a government grant of 10,000 NIS. Plus, companies seeking additional help won’t need to search too hard, as Google will help the companies implement necessary changes, as well as provide them with another grant of 10,000 shekels.
Currently, Israel lags behind the world’s leading industrialized nations in productivity per hour despite its incredibly robust high-tech market. Although the data necessary to improve these companies’ productivity is readily available, research shows a failure to fully leverage it due to a lack of education and training. Early estimates place a potential 6.40% increase in sales for traditional-based businesses with the help of data-driven innovation, something that could add over 50 billion shekels to the Israeli economy.
Ok everyone, consider yourself officially caught up. Have a very prosperous week from all of us here at IsraTransfer.
Looking for the easiest way to transfer money to Israel? IsraTransfer Ltd. is Israel’s leading currency exchange firm specializing in wire transfers of US dollars (USD), British sterling (GBP), Canadian dollars (CAD), euros (EUR), and more to Israel. Founded in 2008, and with over 1 billion NIS exchanged, we are the exclusive operators of the AACI Currency Exchange Program.