The Arad Towels factory stands empty.
(photo credit: ANAV SILVERMAN)
Fresh off Sunday’s news that Israel’s economy grew a feeble 0.3 percent in the second quarter of the year, Manufacturers Association of Israel president Shraga Brosh warned that the economy is stagnating.
“The harsh reality is that the economy is deteriorating to a standstill. The industrialists have long warned of the export deterioration but nobody listened,” he said, accusing the government of ignoring his admonitions.
The anemic quarterly growth was exacerbated by a 12.5% annualized decline in exports, a trend Brosh blamed in part on the strength of the shekel. Manufacturers have seen even larger drops, with export declines of 30% in chemicals, 22% in mining and quarrying, 16% in electrical equipment, and 15% in petroleum products since the start of the year.
Brosh added that 1,300 people had been laid of from factories in recent months, although Israel’s employment market has remained robust with low levels of unemployment and relatively high participation rates.
He called on the government to intervene in order to boost exports, and on the Bank of Israel to increase foreign reserve purchases to moderate the shekel’s strength.
In other alarming news, a survey by BDICoface found that 12.15% of Israeli businesses were teetering on the brink of closure. That figure is up from December’s estimate of 10.6%. The company defines such companies as those with serious cash flow problems, stemming from lost revenues and limited credit.
Cafes and restaurants were the most likely to be on the bring of closing shop , the study found, followed by entertainment venues and moving services.