The high-tech sector in Israel witnessed a concerning nominal decrease in average salaries during May, according to recently published data by the Central Bureau of Statistics (CBS). The average salary in the high-tech sector dropped to NIS 28,031 per month in May, down from NIS 29,219 in April. This decrease in wages may reflect the ongoing impact of the high-tech crisis, which has been exacerbated by a sharp decline in investments this year.
Despite the salary setback, there was a marginal increase in the number of employees in the industry during May, rising by only 0.3% to reach 395,000 employees.
Meanwhile, the overall economy experienced mixed results in terms of wage growth. The average wage across all sectors reached NIS 12,324 per month in May. However, when adjusting for the consumer price index, this reflected a modest increase of 0.5% compared to the data from May 2022. Surprisingly, workers managed to exceed the inflation growth rate, which reached 4.6% in May. This achievement was largely attributed to the wage agreement in the public sector, allowing workers to negotiate higher salaries.
It is worth noting that the nominal decrease in the average wage in the economy between April and May was primarily due to an unusual surge in wages in April. This sudden spike led to a balancing out effect in May. However, when analyzing the annual rate of increase in the nominal salary, a clear acceleration was evident. The annual growth rate rose from 5.4% to 6.1%, indicating a positive trajectory for workers' earnings over time. The anomalous increase in April, followed by the subsequent correction, may have contributed to the temporary decrease in high-tech sector wages.
Looking forward, the Central Bureau of Statistics provided a preliminary estimate for the average wage in the economy in June, revealing an encouraging development. The average wage for Israeli workers in June 2023 amounted to NIS 13,295, showcasing a notable increase compared to May.
Additionally, the CBSE's estimation of job numbers in the economy displayed a positive trend, with the number of jobs reaching 4.329 million in June 2023. This represents a growth rate of 1.8% compared to the same period in 2022.
As the high-tech sector grapples with the challenges of the ongoing crisis and dwindling investments, it remains to be seen how the industry will navigate the complex economic landscape in the coming months. Despite the recent dip in wages, the overall trajectory of the economy appears to be moving towards growth and recovery.