Companies Survey, 2nd quarter, 2002

16/07/2002
All Press Releases In Subject:
The Economy and Economic Activity

Companies Survey, 2nd quarter, 2002

Overview:

Reports from companies for the second quarter of 2002 indicate that the decline in activity in most of the principal industries continued—in manufacturing, trade, construction, hotels, and business services. The decline, which started with the outbreak of the intifada towards the end of 2000, affected all the main aspects of activity: in manufacturing, output continued to fall, but at a lower rate, while the downward trend in domestic sales continued; in the hotel industry, bed-nights fell steeply; in construction, building starts and completions went down; in the two-digit transport industries developments varied, and in communications there were indications that activity had stabilized. Reports on constraints on implementing planned activity rose in most of the principal industries, mainly on the demand side. In construction the rise in constraints on the supply side was notable, particularly the shortage of skilled labor and the rise in prices of inputs. The decline in sales occurred mainly on the domestic side, as did the fall in orders. Cutbacks in stocks and staffing levels also continued. Average inflation expectations for the next twelve months rose significantly in the quarter to 6.2 percent a year, and their variation also increased from its level in the previous quarter. The share of companies expecting inflation to exceed the upper limit of the target inflation range increased to 92 percent. On average, companies expected the exchange rate twelve months hence to be NIS 5.2 to the dollar.

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