The annual average of the consumer confidence index in 2020 decreased to 21%, compared with 6% in 2019 and 5% in 2018. This is according to CBS data published today (Sunday).
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The worsening of the annual average of the index, compared to 2019-2018, reflects the close link between the public’s expectations system and the events of the corona year, and thus increased the feeling of pessimism among the Israeli public regarding the economic situation. The totality of the events of the past year indicates that the public’s expectations regarding the economic situation of the household and of the state are more pessimistic.
A first case of corona disease was discovered in Israel at the end of February 2020, shortly before the World Health Organization declared corona a global epidemic (March 11, 2020). Corona restrictions have created a deep economic crisis with hundreds of thousands of unemployed and businesses closed.
Against this background, starting in March 2020, there has been a decline in the value of the consumer confidence index and the balances that make it up, as well as fluctuations in their values during the year due to the application of restrictions and reliefs to the economy and population.
The consumer confidence index is in the range of minus 100 and plus 100. The closer the index value is to the upper limit, the greater optimism among individuals, and the closer the index value is to the lower limit, the more pessimistic it is. An index close to zero indicates a lack of expectations for a change in the current situation.
The index consists of an average of four scales: the change in the economic situation of the household in the last 12 months, the expected change in the economic situation of the household in the next 12 months, the expected change in the economic situation in Israel in the next 12 months and intentions for large purchases. Electricity, in the next 12 months compared to the last 12 months.
In 2020, the annual average of each of the four balance sheets that make up the index worsened: the annual average of the balance sheet relating to the expected change in the economic situation in the country in the coming year fell to 30%, after falling to 14% in 2019 from an annual average of 7%. -2018; The annual average of the balance sheet relating to the expected change in the economic situation of the household in the coming year fell to 4%, after standing at a positive value in the years 2019-2018 (5% and 7% respectively), and indicated cautious optimism; The annual average of the balance sheet relating to the change that has taken place in the economic situation of the household in the past year has decreased to 19%, from 6% in 2019 and 8% in 2018; The annual average of the balance sheet relating to the intentions of individuals for large purchases in the coming year compared to the last year has dropped to 30% – after in the years 2019-2018 its values were similar and stood at 10% – and 11% -, respectively.
The worsening of the annual average of the consumer confidence index in 2020 occurred among all the population groups examined: among the Jewish population, the annual average decreased to 19%, after in 2019 it decreased to 5% – from an annual average of 2% in 2018; Among Arabs, the annual average fell to 28%, after an improvement in its value in 2019 (13%) compared to 2018 (18%); Among the employed, the annual average dropped to 19% – an array of 3% – in 2018 and 2019; Among those who are not employed, the annual average dropped to 23%, after in 2019 it had already dropped to 12% – from 9% – in 2018. Among those without a matriculation certificate, the annual average dropped to 22% – an array of 9% – in 2019; Among holders of a matriculation certificate or post-secondary certificate, the annual average dropped to 20%, after in 2019 it was 6% and in 2018 it was 4%; Among holders of an academic certificate, the value of the index fell to 19% – a value of 4% – in 2019.
Israel is ranked 19th out of 24 countriesOECD In the rate of decline in consumer confidence in 2020. Only in two countries inOECDDenmark and Sweden The decrease in the value of the index was lower than in previous years. In Denmark, which ranks first on the list, consumer confidence is still optimistic after being the only country in which the consumer confidence index remains positive.