The recent publication of economic data by the Central Bureau of Statistics (CBS) has led to a difference in interpretation that has economists and manufacturers at odds over whether the data indicate an imminent recession or robust economic growth. At issue are the numbers for Israel's exports in the previous quarter. The CBS's statement, published Sunday, said its analysis of the data showed a robust improvement in exports, at 9 percent annual growth, only slightly down from the previous quarter's 10.7%. Other promising indicators mentioned in a related CBS study show a 5.4% annual growth in GDP and an increase in household purchases, with a related 18.7% annual increase in imports. The country's exports were seen to increase by an annual rate of 12.6%. Beside these rosy numbers, the Manufacturers Association of Israel announced that exports marked a gain of a mere 0.5%, with the hi-tech sector dragging down the indicator with a 4% drop in exports. The writer of the analysis, head of the association's economic division Reuben Ginnel, says the weakening of the dollar is the cause of a serious drop in exports. Benzi Diamant, CEO of Telkoor, concurs with the association's pessimistic assessment. "It just doesn't pay to sell overseas anymore," he says. "With products paid for in dollars, and salaries to pay in shekels, we see an increase in our real expenses of 20 to 25 percent. Add that to a stagnation in the world economy, where people are afraid to buy and projects are being put on hold, and you see a situation which is not good." Diamant, who sells electronic equipment to such corporations as Boeing and Motorola, says the present climate has him setting his aspirations at selling enough to survive, not to grow, and doesn't see the situation improving any time soon. "But what really gets us is the fluctuation of the shekel," he says. "We see the dollar drop one day, and continue to fall a few days later. I hope it finally stops somewhere - then it will be possible to talk business." Ginnel says the rosy picture the CBS paints is due to a use of statistical devices that are not sensitive to short-term fluctuations. "The manufacturers who are being hit by the weak dollar have tried to absorb the blow as much as possible, giving workers vacation time or using other methods for cutting back production," he says. "But soon it will start to mean layoffs." On the other hand, Aharon Bloch, the author of one of the CBS studies, says the the association's data is skewed because it only lists goods that can be shipped, but not ideas. "That doesn't take into account software, R&D and various start-ups," he says. Of course, the dollar affects all exporters, Bloch says, but the trade in ideas is less vulnerable to price fluctuations. While there is disagreement regarding the state of the hi-tech industries, which have long been the engine of growth in the Israeli economy, the fate of lower-tech industries is more clear. There, the economic picture divides into two very opposite pictures. On the positive side is the chemical and mineral industries, which have benefited from the surging food prices, which in turn lead farmers to increase their demand for fertilizers and other materials. A prominent success story is Israel Chemicals, whose stock has led the Tel Aviv Stock Exchange with a 36% gain since the beginning of the year. The gloomier picture comes from the category called "traditional manufacturing," which includes textiles, food producers and others. This category is intensively affected by issues of pricing, and the strong shekel has made it increasingly difficult to compete with companies in China and elsewhere in the developing world where wages are a fraction of those paid here. Diamant says the government needs to take action immediately to alleviate the pressures on the manufacturers and assure a healthy business climate, but he sees the bank's monetary policy leading to more anti-inflationary measures that will only make the shekel stronger. Ginnel says the government needs to take steps to advance its fiscal policy so that manufacturers will continue to grow in the upcoming period. He says measures such as lowering taxes and cutting through red tape can counterbalance the effect of monetary pressures.