ECONOMIC SURVEY - 18-Jun-96

(Communicated by GPO Economics Desk) June 18, 1996

MACRO-ECONOMIC SECTOR:

* MAY INFLATION INCREASES BY 1.7%.
Inflation rose by 1.7% during May, and has risen by 6.3% since the beginning of 1996, the Central Bureau of Statistics reported. Chief cause behind the rise was a general increase in most sectors, particularly in the price of housing by 3.6% and clothing and shoes by 4.4%. Food prices (excluding fruits and vegetables) rose by 1.2%, while the price of fruits and vegetables fell by 3.4%. The housing maintenance index rose by 0.9%, while the furniture index rose by 1.0%. Other increases included: health by 1.3%, transportation and communications by 1.1%, and education and culture by 1.5%.
Central Bureau of Statistics - David Neumann, 972-2-553400

* LABOR PRODUCTIVITY AND LABOR COST PER UNIT OUTPUT GREW IN 1995.
Labor productivity (production per hour in the private sector) grew in 1995 by between 1-2%, pushing the annual average labor productivity for 1990-95 to 1%, the Central Bureau of Statistics reported. The labor cost per unit output, which manufacturers in the private sector pay, rose by 1% in 1995, following annual increases of 2-3% in 1994 and 1993, and annual decreases in 1990, 1991, and 1992. In addition, the private sector's annual return on capital decreased to between 7-8% in 1995 after having been at the level of 11% in 1993 and 1994.
Central Bureau of Statistics - David Neumann, 972-2-553400

* PRIVATE CARS TRAVELLED 11% MORE IN 1995 THAN 1994.
Private automobiles travelled 11% more in 1995 reaching 30.6 billion kilometers in 1995, the Central Bureau of Statistics reported. This growth reflected an 8% increase in the number of cars on the road and an average increase of 3% in kilometers travelled. In 1995, the average private car travelled 17,300 kilometers in 1995, compared to 17,200 kilometers in 1994.
Central Bureau of Statistics - David Neumann, 972-2-553400

* ISRAEL'S BALANCE OF TRADE DEFICIT RISES TO $4.15 BILLION.
Israel's balance of trade deficit for the first five months of 1996 was $4.15 billion, following an increase of $924 million, the Central Bureau of Statistics reported. Imports are leading exports (excluding diamonds and fuel) by $9.81 billion to $5.66 billion. For the first five months of the year, industrial exports have been falling by between 0.5-1.0% per month and consist of 68% of total exports. Agriculture exports are 4%, other exports (primarily software) are 2%, and the remaining 26% are diamond exports.
Central Bureau of Statistics - David Neumann, 972-2-553400

FOREIGN TRADE:

* SOFTWARE EXPORTS TO UNITED STATES WERE $120 MILLION IN 1995.
Israel's software exports to the United States were $120 million in 1995, and are expected to rise by 25% to $150 million in 1996, the Manufacturers Association reported. On 17-20.6.96, representatives of 13 U.S. software concerns from the Boston area are visiting Israel in order to develop new joint ventures and investments by U.S. firms in their Israeli counterparts.
Israel Manufacturers Association - Amiram Shore, 972-3-5656748

* SUPERSOL AND U.S. WAL-MART SIGN STRATEGIC AND LOGISTICS AGREEMENT.
Supersol, one of Israel's leading supermarket firms, has signed a strategic and logistics agreement with Wal-Mart, the giant U.S.-based discount chain. The agreement will allow the Israeli concern to use Wal-Mart's extensive marketing and distribution database, and will allow the firm to purchase products, not already marketed in Israel, from Wal-Mart at competitive prices. (Globes, 17.06.96, p.8)

* TELRAD SUPPLIES MYANMAR (BURMA) WITH PUBLIC SWITCHBOARD EQUIPMENT.
Telrad, a Koor Industries subsidiary, has signed an agreement to supply Burma with four public switchboards for Rangoon, Mandalay, and two tourist centers in the country's south. Following this signing, Telrad reports it has supplied $8.5 million worth of telecommunications equipment to the South-East Asia country and holds approximately 40% of its PBX market.

(Ma'ariv, 17.06.96, Business Section p. 11)

PEACE ECONOMICS:

* INDUSTRIALISTS VISIT MOROCCO.
A group of 25 Israeli industrialists visited Morocco at the beginning of June in a visit sponsored by the Israel Export Institute, the Foreign Ministry, and the Israel-Morocco Chamber of Commerce. The group met with government and private sector representatives who were interested in joint ventures.
Israel Export Institute - Dan Bloch, 972-3-5100687

TOURISM: