ECONOMIC SURVEY
December 24, 1998
(Communicated by GPO Economics Desk)
* ISRAEL'S FOREIGN TRADE BALANCE
The Central Bureau of Statistics reported that Israel's imports amounted
to $2.27 billion in November 1998. Exports for the same period totalled
$1.86 billion, creating a November trade deficit of $410 million.
Industrial and software products accounted for 72% of total exports, with
the rest being comprised of diamonds (24%) and agricultural products (4%).
Exports, diamonds excepted, declined by 2.3% in November due to seasonal
changes, after rising 6.5% in October. Raw materials (except for diamonds
and fuel) constituted 49% of all imports, followed by investment inputs
(18%), consumer goods (13%) and fuel and diamonds. Imports increased by
1.8% in November, following a 2.7% increase in October.
Over the past two months, exports of communications and electrical
equipment, rubber and plastics have increased, while declines have been
recorded in the export of food and beverages, textiles, clothing and metal
products. Meanwhile, exports of electronic components and machinery have
remained stable during this period. During the first 10 months of 1998,
Israel imported $24.6 billion in goods and exported $19.3 billion, for a
deficit of $5.3 billion thus far.
* INDUSTRIAL PRODUCTION EXPANDS
The Central Bureau of Statistics reported that industrial production grew
at an annual rate of 3% between August and October 1998 (diamonds
excepted). Production since January 1998, after seasonal fluctuations, has
also risen by 3% compared to the same period in 1997. In contrast, the
number of work-hours for the period between August and October declined by
an annual rate of 3%, with the number of salaried employees holding
steady.
* CONSUMER PRICE INDEX UP 1.3% IN NOVEMBER
The Central Bureau of Statistics reported that the Consumer Price Index
rose 1.3% in November, for a cumulative rise of 8.6% during the first 11
months of 1998. The increase reflects higher prices in areas such as food,
furniture and clothing -- offset by lower fruit and vegetable prices.
Price fluctuations, by sector, are as follows: Food (excluding fruit and
vegetables) +3%; fruits and vegetables -7.4%; housing +0.2%; household
maintenance +2.3%; furniture and household equipment +4.1%; clothing and
footwear +4.7%; health +1.4%; education, culture and entertainment +0.9%;
transport and communications +0.8%; miscellaneous +3.5%.
The Wholesale Price Index of industrial output rose 3.6% in November, for
a cumulative increase of 8.0% in 1998. Price changes, by sector, are as
follows: Mining and quarrying +3.8%; food products +3.7%; soft and
alcoholic beverages and tobacco products +1.9%; textiles +2.8%; wearing
apparel +6.5%; footwear, leather and its products +1.5%; wood and wood
products (excluding furniture) +5.1%; paper and its products +5.5%;
publishing and printing +2.8%; refined petroleum and its products +4.3%;
chemicals and chemical products +6.5%; plastic and rubber products +5.4%;
non-metallic mineral products +1.2%; basic metals +2.2%; metal products
+2.4%; machinery and equipment +4.1%; electric motors and electric
distribution apparatus +1.7%; electronic communication equipment +1.4%;
industrial equipment for control and supervision, medical and scientific
equipment +1.4%; transport equipment +2.2%; furniture +6.5%; jewelry,
goldsmiths' and silversmiths' articles +5.9%; miscellaneous +4.8%. Prices
of agricultural inputs rose by 2.9% in November and of residential
building inputs by 1.3%.
* EMPLOYMENT FIGURES AND CHARACTERISTICS
The Employment Service reported a 1.3% rise in the number of job-seekers
during November 1998 -- reaching a total of 151,300 unemployed persons,
adjusted for seasonal influences.
The Central Bureau of Statistics, meanwhile, reported that about 316,000
of the 657,000 new immigrants to have arrived in Israel since the start of
1990 were employed during the third quarter of 1998, while an additional
43,000 actively sought employment during the same period. 25% of the
immigrants worked in scientific, academic and other professions, 30% were
skilled workers (mainly in industry and construction), 19% worked in sales
and services, 7% held clerical jobs and another 16% filled positions
involving unskilled labor.
CONSUMER BASKET COSTS AND HOUSEHOLDS IN 1997
The Central Bureau of Statistics reported that the cost of the Consumer
Basket of goods and services in 1997 was NIS 8,130 per month per household
-- food, NIS 1,440 (17.7%); housing, NIS 1,790 (22%); education, culture
and entertainment, NIS 1,085 (13.3%), and; transportation and
communications, NIS 1,560 (19.2%). This marks a 4% increase, in real
terms, since the previous survey in 1992-3. The findings are based on a
random sample of 5,230 urban households and, for the first time, the
survey also included rural households. Between the 1992-3 and 1997
surveys, percentage expenditures on food and clothing/footwear declined,
while the prices of housing, transportation and communications, health and
education increased.
An analysis of household income, based on the level of per capita
disposable income, demonstrated that the top decile earned NIS 27,000 per
household before taxes, or none times the NIS 2,970 average income of the
bottom decile. In the area of consumer spending, households in the top
decile spent three times more than those of the bottom decile -- NIS
13,130 per month compared to NIS 4,240 -- with the greatest contrast in
the spending habits of the top and bottom deciles is evident in education,
culture and entertainment, transportation and communications.
In 1997, 24% of bottom decile households own their homes, compared to 84%
of the top decile. The average value of apartments owned by the bottom
decile was NIS 430,000, while the average value of top decile residences
was NIS 1,025,000. While bottom decile families lived in an average of 3.3
rooms, compared to 4.1 rooms among the top decile, because the average
number of persons per household was 5.9 for the bottom decile and 2.6 for
the top decile, the average number of persons per room was 1.8 for the
bottom decile and 0.65 for the top decile.
In 1997, compared to 1992/3, the number of households owning the following
consumer products increased -- air conditioners to 42%; clothes dryers to
24%; video recorders to 60%; home computers to 34%; at least one car to
54%. 39% of households have at least one cellular phone, 67% have
cable television and 5% have internet service.
Central Bureau of Statistics - David Neumann, 972-2-6553400
PRIVATE SECTOR
* ISRAELI-BRITISH R&D FOUNDATION ESTABLISHED
The Finance Ministry announced the establishment of BRITECH, a $25 million
joint Israeli-British technology investment fund to promote partnerships
between Israeli and British firms in the spheres of telecommunications,
biotechnology, software development and electronics. The fund aims to
exploit the comparative advantages of both countries, particularly Israeli
R&D and British international marketing prowess.
* CONFERENCE ON ISRAELI HI-TECH
The Israel Export Institute, the Israel Association of Electronics
Industries and the Israel Industry Center for R&D expect over 100 Israeli
technology firms to attend the International Conference and Business Days
on Israeli Hi-Tech Cooperation at the Netherlands Conference Center in The
Hague between 27-29 April 1999. Israeli hi-tech exports, which amounted to
$5.7 billion in 1997, now comprise over 30% of Israel's foreign trade.