The Companies Survey for the fourth quarter of 2017 indicates that the business sector is continuing to grow impressively. The net balance in the overall business sector increased during the quarter to the levels reached in late 2016 and early 2017, and remains positive, to a statistically significant degree (Figure 1 and Table 1). The net balance in the services industry is positive and significant, and very positive and significant in the hotels industry[1]. In the manufacturing, construction, and transportation and communication industries the net balance is positive and not statistically significant, and it is negative and not significant in the trade industry. In the services, trade and manufacturing industries, expectations are for expansion in the next quarter.

The net balance of manufacturing industry output is positive but statistically insignificant, and reflects an increase in domestic demand, in exports, and in the utilization rate of machinery and equipment. Based on orders for the coming quarter, expectations in the industry are that sales to the domestic market and export sales will increase.


The net balance of services industry revenue remains positive and statistically significant, signifying expansion in the sales of services in Israel and abroad, and an increase in the total number of employees in Israel. Expectations in the industry are that the increase in orders as a whole and orders from abroad will expand in the coming quarter.


Sales in the trade industry declined in the fourth quarter, following declines in the second and third quarters as well. The net balance of sales in the fourth quarter was negative but statistically insignificant. Expectations in the industry are that sales will increase in the next quarter.


In the other industries, the number of responses was too small for the findings to be statistically valid at the industry level.


An examination of supply and demand constraints finds that in the past year, the shortage of professional workers has intensified in the manufacturing, services, and trade industries, and remained high in the construction industry relative to the other industries. In terms of the financing constraint, its level has been low for a number of years, even though there was a slight increase in the fourth quarter due to an increase among small and medium businesses (Figure 3).


In the fourth quarter of 2017, the average of companies’ expectations of the inflation rate over the coming 12 months continued to decline, to 1.26 percent. The share of companies that expect inflation over the coming 12 months to be within the target range indicating price stability (1–3 percent) also declined, to 63 percent, while the share of companies expecting that inflation will remain below the target range increased, to 34 percent. Expectations regarding the exchange rate in the coming quarter increased, to NIS 3.57/$ for the next quarter, while expectations regarding the exchange rate one year from now remained stable at NIS 3.64/$.


The findings of the Companies Survey for the fourth quarter of 2017 are based on the responses of 340 companies and businesses in various industries.


The survey’s questions are qualitative: companies are asked to report the direction of changes in various variables—increase, decline, or stability—and to note the strength of the change—“great” or “slight”.


The Companies Survey data are generally in line with the trends of the macroeconomic data, and the findings’ advantage is in being readily available and providing information rapidly, relative to other sources of data.

Full press release, including graphs and data​

[1] In some of the surveyed industries, such as construction and hotels, the number of responses was small, and this must be taken into account in examining the findings for those industries.