ECONOMIC SURVEY
10 June 1996
(COMMUNICATED BY GPO ECONOMICS DESK)
MACRO-ECONOMIC SECTOR:
* BANKING SECTOR CONTINUES INCREASED NET PROFITABILITY IN 1995.
The average net profitability during the past four years (1992-95) of
Israel's five major banking groups (Leumi, Hapoalim, Discount, Mizrahi,
First International) was 8.3%, compared to a net profitability over the
past ten years of 5.3%, the Bank of Israel's bank supervisor Ze'ev Abeles
reported. In 1995, total after-tax profits for the banking groups was NIS
1.6 billion, compared to NIS 1.3 billion in 1994. The increase in
profitability was due to increased financial profits especially in the
non-linked shekel sector, increased earnings of non-banking enterprises
held by the banks, and the profitability of the banks' foreign branch
subsidiaries. The banks' profitability, however, was hurt by a significant
increase of close to 50% in the banks' provisions for doubtful debts.
Abeles said that because of the complicated nature of the banks, it will
be difficult for Prime Minister-elect Netanyahu to quickly privatize the
banks' equity currently held by the government.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712
* BUILDING STARTS DROP DURING FIRST QUARTER OF 1996
Building starts, both in the number of apartments and the amount of
meterage starting construction, fell during the first quarter of 1996, the
Central Bureau of Statistics reported. Apartment starts were 11,790 during
the first quarter, slightly less than during the last quarter of 1995,
though 42% less than the comparable quarter in 1995. The amount of
meterage starting contruction was 2.3 million square meters, 24% less than
in the fourth quarter of 1995, and 34% less than during the same quarter
in 1995.
Central Bureau of Statistics - David Neumann, 972-2-6553400
* INDUSTRIAL PRODUCTION UP BY MONTHLY AVERAGE OF 0.6% DURING FIRST
QUARTER.
Industrial production rose by a monthly rate of 0.6%, or at an annual rate
of 6.9%, during the first three months of 1996, the Central Bureau of
Statistics reported. This is an increase over the second half of 1995,
during which industrial production rose at a monthly rate by 0.5%, though
during the first half of 1995, industrial production rose at a monthly
rate of 0.9%.
Central Bureau of Statistics - David Neumann, 972-2-6553400
* SALES OF $2 BILLION EXPECTED FOR PUBLISHING INDUSTRY IN 1996.
The local publishing industry expects an 8-10% increase in sales in 1996,
to $2 billion, Oded Mozes, chairman of Manufacturer Association's
publishing division announced at the beginning of Israel Book Week. During
1995, the sector's sales in the local market showed an increase of 8.2%,
to $1.85 billion. Publishing exports fell by 13% during 1995, to $36
million, while publishing imports rose by 20%, to $58 million.
Israel Manufacturers Association - Danny Laish, 972-3-5198755
PEACE ECONOMY:
* BUS LINES INAUGURATE BETWEEN ISRAEL AND JORDAN.
Public transportation bus lines between Israel and Jordan made their first
official trips on 9.6.96. Three busses left Israel for Jordan: from Tel
Aviv, Nazereth, and Haifa. When fully operational scheduled to begin at
the beginning of July six bus lines will run between the two countries.
Operation of the bus lines was enabled following the establishment of 'The
Jordanian International Transportation Company,' which will operate the
lines from Jordan to Israel.
Transportation Ministry - Avner Ovadia, 972-2-319690
* CASTRO MODEL JOINS OTHER ISRAELI TEXTILE FIRMS MANUFACTURING IN JORDAN.
Castro Model, a leading producer of women's clothing, reported that since
February 1996 it has been using Jordan as a manufacturing center for some
of its products meant for export. While other Israeli firms, such as Delta
Galil Textiles, Lordzia Rotex, and Macpell, have been manufacturing simple
textiles in Jordan, Castro is the first to manufacture finished garments
there. Castro president Gabi Rotter reported that the company is producing
in Jordan due to the lower costs there: wages per worker in Jordan are
$150 per month, compared with $800-900 per month in Israel. (Ma'ariv,
10.6.96, p.C3)
FOREIGN TRADE:
* EXPORTS TO BRITIAN INCREASE BY 23% DURING FIRST QUARTER OF 1996.
Exports to Britian rose by 23% to $295 million, compared to an increase in
imports of 21% to $737 million, the Manufacturers Association reported. On
17.6.96, the Israel-Britain Business Council consisting of 20 British
and Israeli industrialists will hold a meeting at the Manufacturers
Association to discuss ways of improving commercial ties between the two
countries.
Manufacturers Assocation - Danny Laish, 972-3-5198755
PRIVATE SECTOR:
* KIMBERLY-CLARK ACQUIRES 49.9% OF HOGLA FOR $49.9 MILLION.
Kimberly-Clark, the US-based paper goods multinational, reported it will
purchase 49.9% of Hogla, which manufactures and distributes household
paper goods, for $49.9 million. Hogla is a subsidiary of American-Israel
Paper Mills (Hadera), whose shares are traded in New York. According to
the agreement signed between the two firms on 9.6.96, Kimberly-Clark will
pay 90% of the acquisition price in cash. (Ha'aretz, 10.6.96)
* FIVE GROUPS COMPETING TO ACQUIRE ISRAEL GENERAL BANK.
As of 9.6.96, five groups had submitted bids to acquire a controlling
interest in Israel General Bank, which Baron Edmond Rothschild is selling.
The groups consist of: First International Bank of the international Safra
Group, Union Bank, Jerusalem Mortgage Bank, Etgar Investment Fund, and a
private group of local investors. The bidders are bidding for 53% of the
bank and the expected price is expected to be close to $40 million.
(Ma'ariv, 10.6.96, p.C1)