Companies Survey, 4th quarter, 2001

10/02/2002
All Press Releases In Subject:
The Economy and Economic Activity

Companies Survey, 4th quarter, 2001

Overview:

Reports from companies for the fourth quarter of 2001 indicate that the decline in activity in most of the principal industries continued. Manufacturing, trade, construction, transport and communications, hotels, and business services were all affected. The decline in these industries was similar to that in the third quarter but significantly exceeded those in other periods of slowdown during the last ten years. All the main aspects of activity were affected by the decline, which started with the outbreak of the intifada in the last quarter of 2000: in manufacturing, domestic sales and exports both fell; in the hotel industry, bed-nights fell steeply; the construction of buildings went down; all areas of transport activity decreased, although in communications activity remained steady. Reports in most of the principal industries of constraints on increasing output, mainly on the demand side—domestic and from abroad—continued, as did the fall in inventories, staffing and orders for the next quarter. Average expectations regarding the level of the exchange rate at the end of 2002 reached NIS 4.54 to the dollar, derived from company responses to the survey following the 2 percentage point reduction of the interest rate by the Bank of Israel in December. Inflation expectations for the next twelve months went down to 2.7 percent a year, and the share of companies expecting inflation to exceed the upper limit of the government’s target range also fell.

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