The weakness of the dollar-shekel exchange rate and a slowdown in the US economy are starting to affect local textile and fashion manufacturers, forcing factories to lay off employees, the Textile and Fashion Association said Wednesday. "In the first quarter of the year, the textile and fashion industry laid off 230 employees and hiring of staff has virtually come to a standstill as a result of the weakness of the dollar and a slowdown in the US economy, which is weighing on the competitiveness of the industry," the association said in a statement. "We are calling upon the government to launch a special-assistance program for an industry that generates income for some 17,000 families... The industry is taking cost-cutting measures and stopping investments into the expansion of factories." In the first half of year the dollar has depreciated about 20 percent against the shekel, following a 9.3% drop 2007. In the first quarter, textile and fashion exports dropped 1% in real terms to $262 million, compared with the same quarter last year, the association said. Its survey found that many textile and fashion exporters are unable to raise the prices they charge foreign customers. As a result, their profits are negligible or merchandise is sold at a loss, manufacturers are losing customers and are having to inject their own capital to survive the downturn. Textile and fashion sales in the domestic market rose 3%-5% to NIS 1.2 billion in the first quarter, mainly as a result of early summer sales by manufacturers concerned they would be overstocked with merchandise. Textile manufacturers want the government to advance an amendment to current legislation that would force the Defense Ministry to buy only locally made uniforms and other textiles. The legislation would allow only Israeli companies that manufacture goods locally to participate in Defense Ministry and Public Security Ministry tenders for textile supplies. Exporters across the manufacturing industry have suffered great losses from the continued depreciation of the dollar against the shekel, thereby losing their competitive edge. On July 10, as the dollar-shekel exchange rate dropped to a 12-year low, the Bank of Israel intervened in the foreign-exchange market by starting to buy $100m. on a daily basis. Since then, the dollar has strengthened by more than 7.3% from NIS 3.20 at the beginning of July to NIS 3.48 on Wednesday.