Companies and businesses have reported a slowdown in growth and business activity during the first quarter of 2008, the Bank of Israel quarterly survey reveals. The survey covered 542 companies and businesses. The slowdown has affected most sectors, save for the hotel and commerce sectors.
The expectations for the second quarter (ending June) are for a slight improvement only in economic and business activity. However, most sectors saw a slowdown in local demand in the first quarter, which made it difficult for companies and businesses to expand their activity. Industrial companies reported a mixed trend in the first quarter, in contrast to the marked rise reported in previous surveys. The slowdown in industrial companies' activity was highlighted by both weaker exports and even more so, weaker sales to the local market. Industrial companies also reported for the first time a fall in new employee intakes and in the utilization of plant and machinery, which they expect to continue into the second quarter of the year.
Also reporting slower growth in the first quarter were companies in the telecommunications and transport sectors. Activity in the overland and railway transportation sectors was stagnant, although Israelis are continuing to travel overseas by air. Companies in the commerce sector are expecting business to slow to a certain degree in the second quarter, although sales were up in the first quarter. Hotels reported a strong increase in business in the first quarter, with higher room occupancy levels and a rise in the number of sforeign tourists. Overnights by foreign tourists also rose sharply, while overnights by Israelis remained unchanged.
The business services sector reported a moderate slowdown in an activity and proceeds. Proceeds in liberal professions such as law, accounting, architecture and engineering were also lower. Only high-tech companies expect further growth in activity in the second quarter, despite the declining shekel-dollar exchange rate.
Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2008
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