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August 14, 2022 12:05 pm

Survey: More Than Half of Israeli High-Tech Companies Expect an Increase in Activity in the Coming Year

avatar by Adrian Filut / CTech

A stock market ticker screen in the lobby of the Tel Aviv Stock Exchange, in the center of Tel Aviv, March 15, 2020. Photo: Flash90.

CTechThe Central Bureau of Statistics published a special survey aimed at assessing the expectations of the high-tech sector in Israel, from which a clear conclusion can be made: despite the layoffs and talk of a recession, Israeli high-tech remains optimistic.

According to the survey, 51% of high-tech companies replied that they expect an increase in activity in the coming year. Moreover, only a tenth of the companies replied that they expect an actual decrease in activity. In other words, contrary to gloomy forecasts and reports of a major slowdown in the US and Europe, about 90% of the companies responded that they do not expect a decrease in activity. In addition, 37% of the companies reported that they do not expect a significant change in activity in the coming year.

The survey examined the expectations of company executives in the high-tech sector in the context of five key aspects (activity, employee recruitment, wages, credit, and raising capital) and by using a comparison between services high-tech (computer software, computer consulting, information services, and R&D) and industrial high-tech (pharmaceutical production, computers, electronic and optical instruments, aircraft manufacturing, etc.).

The survey shows that the optimism among the services sector (which currently constitutes the majority of high-tech activity, both in terms of employees and exports) is much higher than in the industry sector. Some 52% of service companies expected an increase, compared to 38% in industry. Also, the optimism among the high-tech sector is significantly higher compared to the rest of the economy, where only about 30% reported an expectation of activity increase.

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In the survey it is apparent that optimism exists for personnel issues as well: Over 40% of the high-tech companies interviewed responded that they are expected to hire more employees in the coming year, compared to 17% who believed that the number of new employees will decrease.

When you look at this figure by sectors, you can see that in the high-tech industry sector 29% expect a decrease in hiring, which is more pessimistic than in the services sector (17%). At the same time, outside the high-tech sector, the expected decrease in hiring is much lower (9%), and about half of the companies responded that they do not expect any change.

In terms of wages, over 56% of high-tech companies believe they will increase in the coming year, when in this context there is no difference between services and industry. Furthermore, only 2% of high-tech companies reported that they expect a decrease in wages in the coming year. For the rest of the economy as well, companies expect a salary increase (about 45% reported an expectation of a salary increase), apparently against the background of increased inflation over the last year. The expectation of a decrease in wages in the rest of the economy is similar to high-tech and is only 2%.

The results regarding credit are not surprising and should not worry the Bank of Israel, with the absolute majority of the economy not anticipating significant changes. In terms of raising capital, 42% of high-tech companies expect an increase, compared to 15% of companies in the rest of the economy. In the high-tech services sector, the proportion of companies that expect an increase in capital raising is 42%, compared to the industrial sector where a single-digit proportion was recorded. Furthermore, the percentage of companies in the service sector that reported an expected decrease in funding was zero.

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