The Israel Manufacturers Association is expecting a drop in export and industry growth in 2007 due to the expected slowdown in global trade driven by weaker US and European economies.
"2006 was an excellent year, in which the industry grew by 10 percent as in 2000, while for 2007 our growth predictions are around 6% because of a slowdown in world trade, which is expected to grow by 7.5%," said Shraga Brosh, the group's president, ahead of the Association's annual meeting on Wednesday.
According to the annual figures for 2006, the industry grew by 10% compared with 3.7% in the previous year, while exports, increased by 12% in real terms to $29 billion compared with 5% in 2005.
In 2007, the industry's exports are estimated to grow by 7% in real terms generating $32b.
Brosh added that 80% of the growth increase resulted from strength in the hi-tech sector, while traditional industry grew by 2.5%.
"One of the reasons for the good situation of the industry is related to the hiring of 9,000 new employees this year of which 60% were employed in the hi-tech sector," said Brosh.
Hi-tech exports grew 19% this year, while traditional industry exports fell. The number of people employed in traditional industry rose by 1% compared to a 6% increase in the hi-tech sector.
"We must strengthen the research and development of the traditional industries in order to shrink the gap between the two sectors," said Brosh.
High-ranking members of industry speaking at the meeting, including Israel Makov of Teva Pharmaceutical Industries Ltd., also emphasized the need to close the gap between the accomplishments of the hi-tech industry in Israel and the condition of traditional industry.
In 2006, industry sales to the local market increased by 8%, generating a total of $41b.
Sales of industry for exports and to the local market totaled $70b.