3,600 job losses feared by year's end

The global financial crisis will cause a worsening of unemployment here, with an estimated 3,600 jobs expected to be lost by the end of the year and a further wave of job losses in 2009, the Israel National Employment Service warned Thursday.

"The Israeli job market is not immune to the global economic crisis, and the growing signs of an economic slowdown are starting to show," Yossi Farhi, director-general of theEmployment Service, told The Jerusalem Post. "Over the last couple of months we are seeing a slight increase in the number of people losing their jobs. Over the next few months until the end of the year we expect this trend to continue, leading to an estimated 3,600 people losing their jobs based on a monthly average of 1,200 people."

Figures by the Central Bureau of Statistics showed that unemployment fell to a 24-year low in the second quarter of 2008, to 5.9 percent (some 174,000 people). In the first quarter, unemployment had been running at 6.1%.

Farhi added that the plans would be discussed after Succot with the Industry, Trade and Labor Ministry and the Finance Ministry.

"The government has the tools to support businesses, especially small and medium-sized businesses, and encourage employment," said Farhi. "The government needs to invest in infrastructure and support professional work retraining programs in times of crisis, so that people who lose their jobs - for example, in the high-tech industry - can seek employment in traditional industry."

Commenting on the impact of the global economic crisis on industry, Avi Barak, director of the labor division of the Israel Manufacturers Association, said that local companies and factories were under pressure to take efficiency measures.

"There is much talk about a wave of layoffs starting after the holidays, and we could see more job losses in the textile industry," said Barak.

In August, the number of jobseekers rose by 0.9 percent in seasonal terms compared with the previous quarter, following a gradual decline in previous quarters, according to Employment Service figures.

The Employment Service noted that after four years of a continued decline in unemployment data, the August figures pointed to an increase in unemployment figures over the last six months, at an average monthly rate of 0.7%.

Back in the first quarter of this year, the Employment Service reported a 7.9% drop in the number of jobseekers compared with the corresponding quarter of 2007, and a 1.8% drop compared with the fourth quarter of 2007.

Furthermore, demand for workers in the first quarter was 10.6% higher than in the corresponding quarter of last year, and 3.5% higher compared with the preceding quarter.