ECONOMIC SURVEY
(Communicated by GPO Economics Desk)
August 14, 1996
MACRO-ECONOMIC SECTOR:
* CHANGE IN GOVERNMENT HAS NOT STOPPED AMERICAN INVESTMENTS IN ISRAEL.
The recent change in government has not stopped American companies from
investing in Israel, a survey by the Embassy of Israel in the United
States concluded. The embassy's Economic Minister, Ohad Marani, polled
Israel's economic representatives around the United States regarding
American concerns' Israel investment plans and found that while many of
the firms put a "hold" on their plans for a number of weeks following the
election, none had cancelled their plans. Currently, a number of months
after the change in government, the American firms have decided to
continue their investment plans. (Ha'aretz, 14.8.96, pp.C1-2)
* BALANCE OF TRADE DEFICIT INCREASES BY 12% DURING FIRST SEVEN MONTHS OF
1996.
Israel's balance of trade deficit rose to $6.45 billion, in the first
seven months of 1996, an increase of 12% as compared to the same period in
1995, the Central Bureau of Statistics reported. During the period,
exports as percentage of imports fell to 54.9% compared to 55.8% during
the first seven months of 1995. Total exports rose by 5.7% to $10.95
billion, while imports rose by 7.9% to $17.41 billion during the first
seven months of 1996.
Central Bureau of Statistics - David Neumann, 972-2-6553400
* EXPORTERS HURT BY CONTINUING EROSION OF PROFITS.
The continuing erosion of exporters' profits have caused these firms to
cease hiring new workers, to decrease the number of work hours, and has
contributed to a substantial decrease in industrial growth, the Israel
Manufacturers Association reported. According to Shuki Abromovitch, head
of the association's economic department, during the first five months of
1996, hirings by export industries dropped to 0.9%, compared to 4.3%
during the same period in 1995, while the number of work hours in the
sub-sector were reduced by 2% in April and May, as compared to the first
quarter of the year. He reported that the export industries' profits have
been eroding since 1995, during which production cost per unit rose by 8%,
and so far in 1996, the production cost per unit has risen by an
additional 3%.
Manufacturers Association - Shuki Abromovitch, 972-3-5198800
PRIVATE SECTOR:
* 5 GROUPS BID TO PURCHASE AFRICA-ISRAEL FROM BANK LEUMI.
Five groups are contending to acquire 25% of Africa-Israel from Bank
Leumi, the investment company's parent, it was reported after the bidding
period had ended on 11.08.96. Ha'aretz stated that the five groups were:
U.S. investor Sheldon Adelson; contractor Yitzhak Teshuva; contractor
Motti Zisser and industrialist Eitan Wertheimer; diamontaire Lev Lebaib;
UK investors Bernard Schreir and the Mossayif family. The bids valued the
company which has real estate, investment, and insurance holdings, at
between $530-680 million. Bank Leumi must sell 25% of its holdings in
Africa-Israel by the end of 1996, in order to comply with new banking
regulations regarding economic concentration, under which it can only hold
up to 25% of a non-financial firm. (Ha'aretz, 13.08.96, p.C3; Globes,
09.08.96, p.3)
* OIL FOUND NEAR ARAD.
Israel National Oil Company announced that its limited partnership has
found oil at its Tzuk Tamrod #3 site, near Arad. So far, the company is
reporting that the well is producing approximately 600 barrels of oil
daily at a quality level of 20-21 API. The company stresses that these are
only initial tests.
Israel National Oil Company - 972-3-5142020
* DUNKIN' DONUTS TO OPEN FIRST STORE THIS WEEK.
The American donut producer Dunkin' Donuts is scheduled to open its first
Israeli store this week in Tel Aviv on Ibn Gvirol Street. Investment in
the new store and in a Lod facility to produce the donuts is approximately
$2 million. The company reported that it will import all of its raw
ingrediants from the parent corporation in the United States, in order to
ensure the quality of its products. (Ha'aretz, 14.8.96, p.C4)
FOREIGN TRADE:
* MOTOROLA ISRAEL RECEIVES $10 MILLION CONTRACT FROM GHANA.
Motorola Israel's Cellular Infrastructure Division has been awarded a
contract by the Ghanaian government to expand the telephony infrastructure
system of its capital city, Accra. The contract is worth more than $10
million, according to the company.
Motorola Israel - Yitzhak Finikman, 972-3-5658705
* DELEGATION FROM GERMANY'S BOSCH TO VISIT.
A delegation from Germany's industrial concern Bosch will visit Israel in
early September, the company announced. The group will examine investment
opportunities in the software, automotive parts, and research and
development sectors.
Center for Business Promotion - Noah Shani, 972-2-861707
* GOVERNOR OF VIRGINIA AND MAYOR OF LOS ANGELES TO VISIT.
Mayor Richard Riordan of Los Angeles is scheduled to lead a group of 40
businesspeople to Israel in early September, in order to promote trade
relations between the California metropolis and Israel. In November,
Governor George Allen II of Virginia will lead a delegation of
businesspeople from the state interested in promoting trade with Israel.
(Ha'aretz, 13.08.96, p.C2)
Center for Business Promotion
- Noah Shani, 972-2-861707