Bank of Israel: Corporate Survey
(Communicated by Bank of Israel Spokesman)
Jerusalem, January 17, 2000
The Bank of Israel Research Department today (Monday) 17.1.2000,
released its survey of companies for the last quarter of 1999. Based
on corporate reports, the survey shows that for the third consecutive
quarter, growth is continuing and even strengthening in the economy's
key economic sectors -- industry, trade, transportation,
communications and hotels. The decline in the construction sector has
apparently been halted. The report expects continued growth in all
sectors in the first quarter of 2000.
Industrial companies report increase in production for the third
consecutive quarter, following declines since mid-1996. The increase
in production is accompanied by an increase in local sales and
especially exports. It should be emphasized that a large number of
companies are reporting an increase in export orders, while local
orders remain weak. In the fourth quarter, the number of companies
reporting limitations to expansion has not changed, following a
significant decline in he previous quarter. The increase in
production and exports is in all sub-sectors, except for exports of
chemical and plastic and rubber products. High-tech companies
reported continuing rise in production, sales, exports and orders as
well as rising employment.
Trade companies reported a continuous increase in inventory sales
since the beginning of 1999, and expect sales to continue in the
coming quarter. The fourth quarter also shows the first reports of an
increase in workforce in a long time, in expectance of future sales.
Construction companies report that for the first time since the
beginning of 1996, there has been no decline in construction, and
even a slight upswing. For the third consecutive quarter, companies
report an expected rise in construction projects.
The hotel sector reports an expansion of activity for the third
consecutive quarter -- reflected by an increase in foreign tourism,
after a decline since mid-1996. The rise in reservations is expected
to continue in the next quarter. Millennium related tourism has been
a factor in this increase.
Transportation and communications companies report a significant rise
in activity for the third consecutive quarter. Most of the increase
in the fourth quarter has been in air cargo.
Personal business services companies (excluding hotels, banking and
trade) report a significant growth in activities and expect further
growth in orders in the coming quarter. Because the number of
surveyed companies is low (86) no clear conclusions can be drawn from
the sector's figures. This is only the second time that the bank has
surveyed the personal business services sector.
The companies' reports show an expected rate of inflation for the
next 12 months at 4.2% (compared to an annual average of 5,.1% in the
previous quarter) and 1.1% rise in prices in the first quarter of
2000, compared to 1.7% in the pervious quarter.
The survey covered 690 companies and businesses. They were asked to
report trends along certain variables (up, down, no change) and the
degree of change (significant, moderate). Only industrial companies
were asked to take size of the workforce into account in their
answers.