Credit card spending in Israel has stabilized to 10-15% below the period before the outbreak of the coronavirus pandemic, according to credit card use data published by the Bank of Israel. The data come from Shva (Automated Bank Services Ltd.) and are broken down by seven spending categories: pharmacies; education and leisure; supermarket chains; electrical goods, clothing and furniture; tourism; restaurants; and fuel and transport.
Spending has recovered to near pre-coronavirus levels despite the fact that the return to work has been slower than expected - at the end of May, Israel's unemployment rate stood at 23.5%, with 738,000 people looking for work.
Analysis of aggregate spending shows that the recovery trend after the return of the economy to normal was not uniform or linear. According to the data, total credit card spending in Israel on June 16 was about NIS 1 billion, which compares with about NIS 1.1 billion per day before the pandemic. The latest spending figures are, however, not just lower than the figures for January, but lower than at the end of May: on May 28, for example, total credit card spending reached NIS 1.28 billion.
All sectors recovering except tourism
The surge in spending just after the lockdown was lifted may well be due to deferred spending, particularly on electrical goods, which are relatively large items. In the supermarkets, which account for about 20% of spending, sales were lively in the period just before the Shavuot holiday, which fell at the end of May, and this may partly explain the decline seen more recently. It would appear that in past few days the first wave of spending has subsided, and that private consumption is stabilizing at about 10% below pre-coronavirus levels.
Tourism is the only sector that has seen hardly any improvement since the lockdown restrictions were eased. Daily credit card spending by Israelis on tourism remains at more than 60% below where it was before the pandemic struck. In mid-April, the decline was 80%. Spending on restaurants has still not returned to its pre-coronavirus level, but the trend of improvement that started at the end of May has been sustained. Credit card spending in restaurants and cafés on June 14 was 12% below the level recorded on January 14. On June 7 it was 30% below, and on May 27 it was 50% below.
Spending on education and leisure has also risen, but there the gap remains fairly wide: on June 16, spending in these sectors was 17% below January levels. Nevertheless, this represents steady improvement: a week ago, the gap was 24%; two weeks ago it was 33%; and three weeks ago it was 37%.
Fuel and transport almost back to normal
In the fuel and transport sector, spending has almost completely returned to normal. Credit card spending at fuel stations on June 16 was just 3% below the level recorded on January 14. At the peak of the crisis, spending on fuel and transport was about 60% below normal levels.
In the only sector in which private consumption actually rose during the lockdown, namely supermarket chains, spending is still 11% above January levels, but at the start of the crisis supermarket spending was up about 50% as people bought up food and supplies in anticipation of the lockdown.
Sales of electrical goods, clothing and furniture have also been strong. Spending on these items on June 16 was 19% higher than on January 14. Here too, spending was even higher in the period immediately following the lifting of the lockdown - in the last week of May, Israelis spent 30% more on average daily on these items than they did just before the crisis began.
Published by Globes, Israel business news - en.globes.co.il - on June 18, 2020
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