ECONOMIC SURVEY
March 30, 1998
(COMMUNICATED BY GPO ECONOMICS DESK)
MACRO-ECONOMIC SECTOR:
* FOREIGN INVESTMENTS REACHED $3.8 BILLION IN 1997
Investments by foreign citizens in Israel were $3.8 billion in 1997, an
increase from $2.7 billion in 1996 and $2.1 billion in 1995, the Bank of
Israel reported. The central bank reported that the non-financial private
sector imported $7.4 billion of foreign currency into the country during
1997, with $6 billion coming in during the first half of the year due to
the assessment that there was a low risk of a sharp increase in the
exchange rate. The increase in foreign resident investments was primarily
due to investment in Israeli companies' securities.
Bank of Israel - Gabi Fishman, 972-2-6552712
* NATIONAL SAVINGS RATE FALLS IN 1997
Israel's national savings rate fell for the fifth year in a row, to 16.4%
in 1997, a drop from 16.6% in 1996, the Bank of Israel reported. However,
the central bank pointed out that unlike 1995 and 1996 when a fall in
public sector saving propelled the drop in national savings, a drop in
private sector savings was the major ingredient in the fall in national
savings in 1997. The percentage of gross internal savings as part of
economic revenues fell to 19.8% in 1997, down from 22% the year before.
This drop was attributed to a fall of 5.9% in total investments during the
year, which was influenced by a fall in investments in apartments due to
the strong growth registered in that sector since the early 1990s.
Bank of Israel - Gabi Fishman, 972-2-6552712
* HOUSING STARTS DOWN BY 10% IN 1997
Housing construction starts fell by 10% to 50,850 in 1997 as compared to
figures from 1996 and fell by 26% when compared with building starts in
1995, the Central Bureau of Statistics reported. During the fourth quarter
of 1997, housing starts dropped by 31% compared with the same period in
1996. Housing completion, on the other hand, rose by 22% during 1997, due
to the completion of projects begun in 1995.
Central Bureau of Statistics - David Neumann, 972-2-6553400
* COMMERCIAL AND SERVICES ACTIVITIES INCREASE BY 5% IN EARLY 1998
The commercial and services branches of the economy grew by an annual rate
of 5% in early 1998, the Central Bureau of Statistics reported. This rate
equals that of the last quarter of 1997, the bureau reported. These
sectors include wholesale and retail sales, food and guest services and
business and personal services.
Central Bureau of Statistics - David Neumann, 972-2-6553400
* LARGE RETAIL CHAINS ACCOUNT FOR 57% OF FOOD SALES
Large retail chain stores account for approximately 57% of all food sales
to consumers, according to a survey conducted by the Israel Manufacturers
Association. Open markets account for 8.6% of food sales and neighborhood
mini markets account for 6% of sales, the organization said. The average
amount spent on food per month by households in this winter's survey came
to NIS 1680, 16.2% higher than recorded last year.
Israel Manufacturers Association - Danny Laish, 972-3-5198755
UNIVERSITIES:
* SALES OF WEIZMANN INSTITUTE INITIATED PRODUCTS WERE $600 MILLION IN 1997
Sales of $600 million in 1997 were recorded by products which had their
initial research done at the Wiezmann Institute of Science, according to a
survey prepared by a Tel Aviv-based accounting firm. The firm reported
that 19 start-up companies have been established using know-how or ideas
originating from the Rehovot campus. The Kiryat Weizmann industrial park,
affiliated with the Institute, is home to some 70 companies with aggregate
sales of over $500 million.
Weizmann Institute - Yivsam Azgad, 972-8-9343856
DEFENSE INDUSTRIES SECTOR:
* ISRAEL AIRCRAFT INDUSTRIES RECEIVES CONTRACT WORTH $163 MILLION FROM
BOEING
Israel Aircraft Industries reported it has received a four year contract
worth $163 million from U.S. aircraft manufacturer Boeing. The contract
for the production of F-15 parts including doors, conformal fuel tanks and
fuselage parts will go to the IAI's Lahav plant, according to IAI.
FOREIGN TRADE:
* EXPORTS TO INDIA INCREASE BY 12% IN 1997
Israeli exports to India rose by 12% to $355 million in 1997, the Israel
Manufacturers Association reported during a visit by representatives from
India's manufacturing association. Exports primarily consisted of precious
stones and metals, machinery and chemicals. Imports from the world's
largest democracy rose by 17% in 1997 to $293 million, primarily of
diamonds and textiles.
Israel Manufacturers Association -
Danny Laish, 972-3-5198755