Hiring grinds down in big industries

Traditional sectors lay off 685 workers in July and August

November 7, 2010 23:52
3 minute read.
A ship unloads in the port of Haifa

311_ship unloads in Haifa. (photo credit: The Jerusalem Post)


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A slow recovery in global markets and a strong shekel are weighing on local exports, forcing many factories – particularly those in traditional industries – to lay off hundreds of workers, the Israel Manufacturers’ Association reported on Sunday.

“On the back of a decline in industrial exports which are impacted by a combination of the continued shekel appreciation alongside a slowdown in global demand, employers in the industry are starting to stem the pace of the hiring of workers, while some of them were forced in recent months to lay off staff, mainly in the traditional industries,” said Shraga Brosh, President of the Israel Manufacturers’ Association.

Brosh called upon the Finance Ministry to implement measures that will help strengthen the competitiveness of the industry by lowering production costs, and cutting municipal and energy taxes, as well as employers’ social security contributions.

Brosh also suggested for the treasury to introduce fiscal tools which would be tailored to boost exports such as the establishment of a fund to support marketing abroad.

The report on the employment situation in the industry found a slowdown in the hiring pace of workers in July and August of this year across almost all industrial sectors while showing renewed firing in the traditional technology sectors of the industry.

“There are indications that in the coming months this trend will continue and we expect to see further slowdown in the hiring pace of workers in the industry,” said Ruby Ginel, deputy head of the economics division at the Israel Manufacturers’ Association.

There was an increase of a moderate 0.4 percent in the hiring of workers in July and August, adding 1,260 new employees to the industry.

Since the end of 2009, the number of workers in the industry grew by 11,500, for a cumulative increase of 3.4%.

Ginel added though that the number of employees in the industry was still 2.9% lower than in the first quarter of 2008, before the wave of layoffs in the industry commenced.

In the third quarter of the year, the number of available positions in the industry grew at a moderate pace of 4%, representing an addition of 280 jobs after strong growth of 29% in the second quarter of 2010.

In the traditional technology sector – including food, textiles, clothing, wood furniture, leather and paper products – employers started to lay off workers. In July and August, 685 workers were fired within the traditional sector following a year of continued hiring. The majority of layoffs were found within the food sector after a year of hiring growth in the sector at an average quarterly pace of 1.1%.

Sector by sector analysis showed that hiring in the hitech sector – specifically electronic components equipment, medical devices, and communications equipment – grew at a slow pace of 1.2% in the reported period, adding 1,280 workers. At the same time in the mixed hi-tech sector – including chemicals, oil, machinery, and electrical equipment – employers hired 460 workers in July and August, representing an increase of 0.9%, following a rise of 1.6% in the second quarter of the year.

In the mixed-traditional technology sector – namely rubber, plastics, metals and jewelry – employers hired 190 workers in the July to August period showing an increase of a moderate 0.2% compared with growth of 1% in the first two quarters of the year.

According to the most recent figures published by the Central Bureau of Statistics, exports of goods, not including diamonds, dropped by 9.4% in annual terms in the months July through September, following a decline of 1.9% in the previous three months. During the same period, industrial exports fell by 8.5% in annual terms.

Last week, the association reported that industrial output in July and August declined by 1% in real terms after growing at a rate of 6% in the second quarter of 2010. The fall was led by a renewed drop of 4.2% in hi-tech output.

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