Hotels in Eilat.
Hotels in Eilat. Photo by Eliyahu Hershkovitz
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The managers' index for August showed that business people think the economy is getting worse, just like their businesses are.

A survey conducted by the Central Bureau of Statistics of business trends showed a negative 12.2% figure for August, down from -11.8% in July. This index, known as the business tendency balance, represents a comparison of those companies whose managers think things are getting better to those who are pessimistic - and a negative ratio means more are pessimistic. The index has been negative since May 2011.

The survey shows that all business sectors took a turn for the worse in August compared to July, except for retailing. The managers' confidence levels in August were at the lowest for industry since December 2010. The only bright spot for August was that managers said more credit was available during the month.

Export figures also worsened, continuing the slide that began in April. Industrial production was also down last month, and the managers' confidence in the future trends in manufacturing were the lowest since the CBS started the survey.

"Based on developments since the end of June, it is likely that the growth rate projection for 2013 will be revised downward in the September update to the forecast," wrote the Bank of Israel in the minutes of the meeting of its Monetary Committee, held at the end of August, at which the central bank decided to leave September interest rates unchanged at 2.25%.

Yesterday, the Bank of Israel released the minutes of the meetings held on August 26 and 27.

The central bank forecast in June that Israeli economic growth for all of 2012 would be 3.1%, with 3.4% in 2013. Now the 2013 estimates have been lowered to only 3%. Growth in the third and fourth quarters of this year is also expected to slow, said the Bank of Israel.

The Monetary Committee was also wary of the absence of a budget for 2013: "Decisions on government expenditure in the coming year have not yet been reached; specifically, whether a budget for 2013, which will require significant cuts in accordance with the 'automatic pilot' in order to remain within the expenditure rule, will be passed soon, or if instead - if the Knesset does not approve a budget for 2013 before the start of next year - a transition budget which allows monthly expenditure of 1/12 of the 2012 budget, which would reflect considerable restraint, will be managed," wrote the central bank.