Job market cools as unemployment stays low

Israel’s job market is cooling off, albeit very slowly. In June 2023 there was a fall of more than 2% in the number of job vacancies from 126,683 to 123,657, the Central Bureau of Statistics reports. At the same time, seasonably- adjusted unemployment remains unchanged at just 3.6% – a very low rate reflecting a market in full employment.

The Central Bureau of Statistics points out that the number of vacancies per 100 employed people stands at 3.9 – and for the first time since February 2021, it has fallen below the threshold of 4 jobs per 100 employees. In any case, there is still a long way to go in the rate of vacancies, when in 2019, before the Covid pandemic, this rate averaged about 3.5 vacancies per 100 employed.

Sharp falls in the rate of vacancies can be seen in the number of jobs for engineers and software developers, down 5% and 6% respectively. On the other hand, there was a rise in the number of vacancies in real estate, and construction, where the percentage of vacancies rose by 10%.

The slight decrease in demand for workers indicates the effect of the interest rate increase, the monetary restraint measure exercised by the Bank of Israel, and its effect on the market. On the other hand, the number of the unemployed in Israel remains at a very low level and may signal that the market is “tight” and could lead to wage pressures, pushing inflation higher.

The trend in high-tech

The job vacancy data also show the quarterly trend in the high-tech sector. The report shows that in the last quarter of 2022, a total of 272,803 jobs and 14,487 vacancies were recorded in the high-tech branches of services (software engineering, information services and R&D), while 100,287 jobs and 3,639 vacancies were recorded in the high-tech branches of industry (manufacturing).

In the second quarter of 2023, the number of jobs in high-tech sectors in services fell to 262,162, and the number of vacancies fell to 11,744. In the high-tech branches of industry, the number of jobs rose to 106,008, while the number of vacancies fell to 3,016.

In 2022, there was a rise in the number of jobs in high-tech sectors in services to a peak of 272,803 in the last quarter of 2022. There was then a moderate fall in the number of jobs to 262,162 in the second quarter of 2023. The Central Bureau of Statistics report explains that “it is assumed that this slowdown is affected by the changes in the interest rate environment and the increase in uncertainty during this period.”

The number of vacancies in the high-tech sectors in services has continuously fallen from a record 24,018 in the first quarter of 2022, to 11,744 in the second quarter of 2023.

Published by Globes, Israel business news – en.globes.co.il – on July 17, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.