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Industrial exports fell 2 percent in real terms to $6.3 billion in the fourth quarter of 2005, according to the Manufacturers Association of Israel, which called the finding "worrying."
In all of 2005, industrial exports grew 4.5% - below the worldwide trade growth figure of 7% - to total $25.5b. In 2004, exports surged 17.6%.
"The government must put exports at the top of the agenda of economic issues to be addressed in 2006," said Manufacturers president Shraga Brosh. "If we wish to achieve our goals - 15% annual growth in exports - we cannot allow ourselves even one month of contraction in exports."
Brosh argued that with a "relatively small" investment of $80 million over the next two years - toward specific programs, research and development, helping small and medium businesses develop export strategies, and locating projects abroad - exports could be boosted by $2b., creating 30,000 jobs in Israel.
By sector, medium hi-tech exports - including chemicals and oil refineries, machinery and equipment, engines, and electronics - suffered the most, falling 6% in the last quarter of 2005 and 2% for the year, to $6.93b.
In contrast, hi-tech exports grew 10% to $11.74b. in 2005, despite a weak 1% fourth quarter growth figure.
Medium low-tech exports remained stable at $4.75b. in 2005, while traditional industrial exports fell 1% to $2.07b.
On a positive note for manufacturers, the Association's study found that exporting became more lucrative in 2005, as labor costs fell 6.5% in the fourth quarter in comparison with the same period of 2004.