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Companies that manufacture construction materials and consumables are increasingly moving their operations out of the country, according to the Manufacturers Association of Israel, which reported this week that some 130 companies have relocated to Eastern Europe, the Far East and the US over the past five years while an additional 60 plan on relocating in the near future.
"This trend comes as a result of a glut of manufacturers here, the weakness of the dollar, globalization, port strikes, logistical problems and bureaucratic tie-ups," said Doron Kemplar, chairman of the Association's construction materials and consumables branch.
Kemplar also noted that the numbers of new workers expected to be hired in the country's construction materials and consumables sectors is expected to rise 0.8 just percent this year. More than 97,400 workers are employed currently at companies in these sectors.
Despite the relocation of dozens of manufacturers, sales are expected to grow 2.1% in 2007 to $15.15 billion, with local sales comprising $12.19b. of the total. Exports are projected to rise 4% to $2.96b.
"However," said Kemplar, "in order to increase our output, we need the support of the government, specifically the Industry, Trade and Labor and Finance Ministries, to invest more effort in developing the sectors' research and development branches and I am, therefore, asking for the allotment of NIS 100 million to achieve this goal."
Last year, said Kemplar, five furniture and wood-products factories closed, causing the layoff of some 200 workers.
Local manufacturers, he added, also are suffering from the growth of cheap imports from Turkey, China and the Palestinian Authority, while the current weakness of the dollar has caused dozens of manufacturers to void contracts with customers abroad.
The report is based on a survey the Association conducted of dozens of Israeli manufacturers in advance of this week's "construction material and consumable day," Included in the survey were producers of plastic, rubber, paper, furniture, building materials and shoes.
In 2006, local sales of construction materials and consumables grew 2% from 2005 to $11.9b., while exports rose 5% to $2.78b.