Companies Survey, 1st quarter, 2005

25/04/2005
All Press Releases In Subject:
The Economy and Economic Activity

Companies Survey, 1st quarter, 2005

Overview:

Reports from companies for the first quarter of 2005 indicate that total economic activity continued to expand, for the fifth consecutive quarter. The growth in activity encompassed most of the principal industries (with the exception of the construction industry), and expectations in the majority of industries were of a continued increase in activity and particularly in exports. Manufacturing output rose to a moderate extent, reflecting mainly an increase in export sales and static sales to the domestic market. The moderate increase in export orders continued, and a slight increase was also recorded in orders for the domestic market. Trading companies’ sales continued to rise compared with the previous quarter, and a further growth in sales was expected for the next quarter. Business services companies reported a continued rise in revenue deriving mainly from an increase in sales of services abroad. The number of hotel bed nights of foreign tourists and Israelis continued to rise, and activity was expected to continue growing in the next quarter. In the transport and communications secondary industries, sea, air and overland transport went up moderately, and the communications industry remained steady. In the construction industry the decline in activity continued although at a more moderate rate, principally in buildings and infrastructures. For the first time in a long period however, companies in that industry were expecting a slight growth in activity in the next quarter. Reports on the severity of constraints on the implementation of activity showed a moderate reduction in demand-side constraints in most industries (with the exception of construction and manufacturing). The demand constraint nonetheless remained the most effective constraint on activity in the quarter (in the construction industry the supply-side constraint was also effective). Average inflation expectations for the next twelve months remained stable at 2.1 percent, with the share of companies expecting inflation to exceed the targeted range remaining at 9 percent. Companies expected, on average, that the exchange rate in twelve months would be NIS 4.55 to the dollar, compared with NIS 4.59 in the previous quarterly survey.

Link to File