Companies Survey, 1st quarter, 2006

06/06/2006
All Press Releases In Subject:
The Economy and Economic Activity

Companies Survey, 1st quarter, 2006

Overview:

Reports from companies for the first quarter of 2006 indicate that the expansion in total economic activity has now lasted for three consecutive years. The growth in activity encompassed all of the principal industries including construction. An increase in activity during the next quarter is expected in all the principal industries, and therefore the leading index in this Survey is indicative of an overall growth in business-sector activity during the second quarter of 2006 as well. Increases in manufacturing output reflected a growth in export sales, as well as sales to the domestic market. The growth in orders, for the domestic market and for exports in the next quarter, continued. The growth in sales among trading companies continued, and companies expect a growth in sales during the next quarter too. Business services companies reported a continued rise in revenue that was reflected by increased sales of services in Israel and abroad, with the increase expected to continue in the next quarter. In the hotel industry activity continued to increase, reflecting a considerable rise in the number of bed nights of foreign tourists together with a slight rise 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, sales registered a remarkable increase after remaining stable in the preceding quarter. The increase in this quarter reflected a rise in sales of services to Israelis and nonresidents, and growth is expected to continue in the next quarter. The construction industry registered a slight rise after three quarters characterized by stable levels of activity. Reports on the severity of constraints on the implementation of activity show that compared with the previous quarter, supply-side constraints increased slightly in all industries (except for services), while a mixed trend in demand-side constraints was recorded in the industries reviewed. Overall, the severity of supply-side constraints in most industries approximated to the level of severity of demand-side constraints. Average inflation expectations for the next 12 months rose slightly during the quarter to 2.8 percent, with a slight rise in the share of companies expecting inflation to exceed the target range; 19 percent in the quarter reviewed compared to 18 percent in the previous quarter. Companies expect, on average, that the exchange rate in 12 months would be NIS 4.83 to the dollar, compared to NIS 4.76 that was expected in the previous quarterly survey.

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