The weakening dollar has caused a loss of some $3.4 billion to the country's manufacturing sector and has forced local industrialists to implement a hiring freeze since the beginning of 2007, the Manufacturers' Association of Israel said on Wednesday.
"The government must provide immediate assistance of $50 million in order to allow our manufacturers and exporters to compete against the euro and the other world currencies," said Manufacturers' Association President Shraga Brosh. "If no action is taken, the results will be catastrophic for the country's manufacturers, especially the small and mid-size firms, which make up 97 percent of the market."
According to numbers from the association, the hiring of 35,000 new manufacturing workers has been put on hold due to losses incurred from the strength of the shekel against the dollar.
Meanwhile, exporters have already lost some $2.5b. this year, said Brosh, while domestic sales of manufactured items are expected to fall $800m. as a result of the increase in costs.
"The cause of the losses stems from the gap between what the dollar was expected to be at when orders are payed for and what the rate actually is," said Pinhas Kimmelman, chairman of the forum of industrial financial managers in the Manufacturers' Association, earlier this year.
Meanwhile, the Export Institute of Israel reported that some 400 small and medium-sized exporters have stopped exporting due to the significant losses they were incurring, while many others have greatly reduced their export quantities.
"Over the last few days, we have received dozens of phone calls from small exporters who have said that they cannot continue to do business should the dollar remain at its current level," Brosh said. The shekel was trading at 3.88 against the dollar as of Wednesday night.
"The weak dollar is seriously going to hurt export earnings and will hamper the ability of Israeli companies to compete in the global market," Brosh said.
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