Companies Survey: First Q of 2019 reflects moderation in the expansion of business sector activity

The Companies Survey for the first quarter of 2019 reflects a moderation in the rate of expansion of business sector activity. The net balance of the business sector declined in the first quarter of 2019 to close to zero. In the services, trade and industry sectors, the Bank of Israel expects expansion in the next quarter.
In the last quarter the rise in the net balance of output in the manufacturing industry was halted in the previous two quarters. The net balance of output in the last quarter was negligible but insignificant, especially among companies whose level of innovation is mixed, and reflects a stabilization in sales. On the basis of orders for the next quarter, the industry expects sales to the domestic market to stabilize and export sales to expand.
The net balance of revenue in the services industry was negative for the first time in several years, but it is not significant, indicating a decline in sales of services in Israel and a moderation in the number of employees. The sector expects that activity will expand in the next quarter and orders from abroad will increase.
In the last quarter, the growth in sales in the two preceding quarters was halted. The net balance of sales in the last quarter is negligible but insignificant. The division expects sales to increase in the next quarter and there will be no change in the number of employees.
In the other industries, the number of answers is too small to give the findings statistical validity at the industry level.
When examining supply and demand constraints, it is found that the intensity of the shortage of skilled workers stabilized in the last year in the services and trade industries and fell in the manufacturing industry. In addition, in the manufacturing industry, the domestic demand constraint worsened in the past year. When examining the constraint of funding difficulties, it is found that its level has been low for several years; In the last quarter it continued to rise as a result of the continued increase in the large and small companies (Figure 3).
In the first quarter of 2019, the average expectations of companies for inflation in the next twelve months fell to 1.4 percent; The share of companies expecting inflation to exceed the target range also declined (to 3 percent), and the share of companies expecting inflation in the next twelve months to rise (to 20 percent) rose. The outlook for the dollar in the next quarter fell from NIS 3.75 to the dollar in the last quarter of 2018 to 3.64 in the first quarter of 2019.
The findings from the Companies Survey for the first quarter of 2019 are based on the responses of 314 businesses and companies in the various sectors of the economy.
QUESTIONS IN A QUALITY SURVEY: Companies and businesses are asked to report on the direction of change of the various variables (increase, decline or stability) and to indicate their intensity (large or small).
It was generally found that the data from the Companies Survey are consistent with the trends in the macroeconomic data of the economy, and their advantage lies in the fact that they are available and provide information relatively quickly to the other sources of data.