"Business sector activity expanded in the first quarter of 2012, checking the slowdown trend reflected in the survey in the second half of last year," the Bank of Israel said Sunday in its Companies Survey for the First Quarter of 2012.

More than half of the 510 respondents in the survey reported increased activity during the first quarter, with the rest reporting a decline in activity. "The probability of slowdown, which is calculated in the leading index of the survey, is below 50%, which reflects companies' optimism about the future compared with the existing situation. Against all these, most of the net balances are lower in the review quarter than they were during 2010 and the beginning of 2011, and industrial exports have dropped."

The Bank of Israel adds, "Manufacturing output grew in the first quarter of 2012, accompanied by an increase in inventories of finished products. Against this, domestic sales did not increase, exports dropped, and orders for the coming quarter remained unchanged. In commerce an increase in sales was recorded, but, similar to the previous quarter, the increase was not statistically significant. With that, expectations of companies in the sector are for a marked increase in sales in the next quarter."

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