Mobile World Congress 58.
(photo credit: Manu Fernandez/AP)
The Manufacturers Association of Israel is worried that domestic production will
decline as companies shift production abroad. Analysis of surveys by the
association’s research department found a 9 percent increase in the number of
companies that expanded their foreign production between the fourth quarter of
2009 and the first quarter of 2011.
The biggest increase, 4%, occurred in
the first quarter of 2011.
Twenty-eight percent of Israeli manufacturers
now have foreign manufacturing operations, and the association warns that this
expansion comes at the expense of growth in Israel.
predicts that the proportion of manufacturers with foreign operations will
continue to grow rapidly and reach 45% by the second quarter of 2012.
association bases this figure on a question in the Survey of Expectations in
Industry for the first quarter of 2010, which asked manufacturers about their
intentions over the next two years. “So far, the responses and actions are
congruent,” it said.
Sources at the association’s research department
said figures reflect other surveys and indices that examined the business
environment of manufacturers.
“Manufacturers look at their business
environment and see the dollar falling, the shekel strengthening, and they fear
that if they greatly increase exports, their shekel income will go nowhere,” one
of the sources said. “This comes on top of higher prices for water, local
property taxes, National Insurance Institute contributions, relatively high
salaries, the excise hike on fuels and so on, which deal lethal blows to their
competitiveness in the global market.”
In an interview with Globes,
Manufacturers Association of Israel president Shraga Brosh warned against “the
deadlock around the corner.”
“We warn and we are not heard.” he said,
“The currency problem is existential in a case like ours, that of
export-oriented industry. For 15 years, Israeli governments have acted to help
industry grow and export, but this government ignores the forecasts and relies
on past performance.
“The trends are clear, and if they only partly
materialize, they will cause irreversible damage to the economy because a
company that has already sent its production abroad and set up in another
country cannot be brought back to Israel. It’s simply frustrating to see that
because of the absence of economic leadership in Israel, industry is growing,
but not here.”