Companies Survey, 3rd quarter, 2005

10/11/2005
All Press Releases In Subject:
The Economy and Economic Activity

Companies Survey, 3rd quarter, 2005

Overview:

Reports from companies for the third quarter of 2005 indicate that total economic activity continued to expand, for the seventh consecutive quarter. While the growth in activity encompassed most of the principal industries, expectations for the next quarter are not uniform. Increases in manufacturing output reflected a growth in both exports and sales to the domestic market, and the growth in orders for exports and for the local market in the next quarter continued. Trading companies recorded a further growth in sales compared with the previous quarter, although decreases in sales are expected in the next quarter. Business services companies reported a continued rise in revenue that was reflected by increased sales of services in Israel and abroad, with the increases expected to continue in the next quarter. The number of hotel bed nights of foreign tourists continued to rise concurrent with stability in the number of bed nights of Israelis, and the expansion in activity is expected to continue in the next quarter. In the transport and communications industries, the growth in the sale of services to nonresidents and residents was maintained, with a further increase in orders expected in the next quarter. In the construction industry the static level of activity characteristic of the industry in the second quarter continued, following the decreases in the previous quarters. Companies in that industry (principally small and medium-sized companies) are expecting decreases in activity in the next quarter. Reports on the severity of constraints on the implementation of activity show that compared with the previous quarter, demand-side constraints eased in most industries while supply-side constraints increased in the majority of industries. Average inflation expectations for the next twelve months rose to 2.6 percent during the quarter, concurrent with a notable increase, from 14 percent to 22 percent in the percentage of companies expecting inflation to exceed the targeted range. Companies expected, on average, that the exchange rate in twelve months would be NIS 4.73 to the dollar, similar to the level of NIS 4.69 in the previous quarterly survey.

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