BDI CODE 2014 - Israel's Leading Companies, Law Firms, Accounting Firms, Best Companies To Work For - page 216

BdiCode 2014
Percentage Change in Industrial Manufacturing, by Branch – 2013 vs. 2012
Commuc. equip.
Textile, clothing
& leather
Rubber & plastic
Electronic components
and equip.
Food beverage &
Metal products
Industry excl.
Machinery & Equp.
Chemicals &
petroleum products
Basic metal products
mineral pdts.
Transport equip.
Mining & Quarries
(incl. natural gas)
-4.9% -2.9% -2.6% -1.8% -1.4% -0.6%
0.4% 0.5% 0.9%
Developments in Israeli Industry in 2013
Industrial production (excluding diamonds) increased by 0.5% in 2013
compared with 4% in 2012. Mainly, Mining and Quarrying (this branch
includes natural gas production sold in the local market), which increased
by 32.1% in 2013. In contrast, the decline in the following sectors was
prominent: Communications Equipment – 10.3%, and Textile and Clothing
– 4.9%. Both branches are export oriented and therefore have been
impacted by the decline in global trade.
Total investment in industry (excluding diamonds) declined by 22% in 2013.
Only two sectors recorded positive investment: Mining and Quarrying,
which includes natural gas production that showed an increase of 11.3%
and Non Metallic Mineral products (which manufactures products for the
construction industry). This sector showed an increase in investment, in real
terms, of 9.2%. In contrast, the following industries registered significant
reductions in investment: Paper and Paper products – about 43%, Chemicals
and Petroleum products – about 39%, Electronic and Optical instruments –
about 36% and Basic Metal products – about 34%.
The number of salaried employees in industry (excluding diamonds) increased
by only 0.3% in 2013 compared with 0.8% in 2012. Employment rose mainly
in Mining and Quarrying – 3% and in Chemicals – 2.2%.
Industrial exports (excluding diamonds), increased in real terms by 2.8% in
2013 compared with a decrease of approximately 4% in 2012.
It is apparent, that in 2013 the industrial branches, with the exception of
Mining and Quarrying, recorded a regression in the major parameters. Two
main factors influenced the state of industry: first, a slowdown in world
economic growth and in global trade, mainly in developed countries that
are the main destinations for Israeli exports. Second, the appreciation, in real
terms, of the Shekel against major currencies which hurt export profitability
and reduced the prices of competing imported products in the local market.
It is important to note, that the Mining and Quarrying branch is mostly
affected by developments in natural gas production. This represents a
significant structural change in the Israeli economy and is not influenced
by the business cycle in the economy or by short-term trends. In addition,
natural gas production has a significant effect on Israel's Balance of Payments,
which is expressed in a reduction in imports of fuel products thus making
an important contribution to the surplus in the Current Account. In 2013,
indeed, there was a decrease in the imports of fuel products.
Analysis of the trends in 2013 in the Information Technology sector (Computer
and R&D services, Communications services, and Hi-Tech industry) shows
industrial output in the sector fell by about 4% (compared with an increase
of approximately 7% in 2012). Startup companies recorded a relatively
low decrease, 0.4%, following significant growth of about 32% in 2012.
In 2013, the output of the Information Technology sector reached about 25
billion dollars, half of which are Computer and R&D services, about 31%
is Hi-Tech industry, about 15% are Communications services and about
5% are Startup companies. In the same year, the Information Technology
sector employed about 237,000 workers, around 58% in Computer and
R&D services. In 2013, exports of the Information Technology sector reached
28 billion dollars.
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