Aug 21, 2009

Start of Expansion in the Israeli IT market

Based on the many meetings, client technological road maps, round tables and social occassions this last month I can start "forecasting" an expansion in the market after over one year of downturn that even felt like a meltdown (Q42008 and Q12009).
And as I wrote in several occasions the IT start of expansion in Israel will probably start after the high Jewish holidays of September and October.
The STKI forecast for IT market growth of -12% for Israel is still on track and the forecast of other analysts can be read here .

The picture (above) shows the 1990-2009 yearly data (STKI IT market forecast and BoI data):
1. STKI identified a high startistical correlation between it's IT rate of change numbers and the numbers given by the Bank of Israel (composite state-of-the-economy index (deviation from the trend) based on the Markov regime-switching model).

2.- The composite index and especially the deviation from the trend numbers gives an accurate description of the business cycle ex post facto, with regard to their high correlation with the GDP, final uses and employment series, and with regard to identifying the turning points in the cycle in real time. The probability of recession successfully detects a downturn immediately, and more sharply about two months after its onset. The start of expansion, however, takes longer to detect. Bank of Israel page on the subject.

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