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Industrial production down 6%
Central Bureau of Statistics reports significant slowdown in industrial production's growth rate in last four months of 2010; demand for workers drops accordingly
The year 2010 was a good year for the Israeli industry. Industrial production grew by 7.8% compared to 2009, exports rose by 13.4% and the industry created about 6,000 new jobs.
A 6% drop was recorded in the industrial production in Israel
from October to December, alongside a 32.5% decrease in the production rate in the mixed-elite technology industries (chemistry, machines, electrical equipment and transportation tools).
According to the Central Bureau of Statistics, however, the last four months of the year saw a significant slowdown in the industrial production's growth rate.
Facts & Figures
Avital Lahav
Central Bureau of Statistics releases data suggesting rise in commercial deficit, construction and transportation investment
The data point to a decline in Israeli factories' sales: The industry's early sales dropped by 1.9% in the last quarter of the year, while exports were down 6.2%.
The demand for workers dropped accordingly. The last three months of 2010 saw a mere 0.7% rise in the number of jobs, while in practice, the number of work hours dropped by 1.1%.
Start of new crisis?
The industry appears to have weakened due to the drop in exports, although there are differences of opinion over the reason for the export rate's decline. Industrialists say the exports' profitability was affected by the shekel's appreciation against the dollar and euro, which is the result of the recent rise in Israel's interest rate.
Economists, on the other hand, note that the entire global trade is in a slowdown state due to European countries' debts, while some claim that Israeli exports are slowly responding to the change of direction in the world since the 2008-2009 financial crisis, which saw demands move from Europe and North American to Southeast Asia and South America.
Regardless of the cause, the Israeli industry appears to be at the start of a new crisis. According to the CBS, "The growth recorded since June 2009 stopped in June 2010, and from July 2010 figures point to a decline in industrial production. The drop is expressed mainly in the mixed-elite technology industries."
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