Business sees 4.43 shekel by June '08 SHARON WROBEL Israeli businesses are optimistic, predicting that the shekel-dollar exchange rate will find itself at NIS 4.43 at the end of June 2008 and 4.27 by the end of September, according to the Bank of Israel companies survey for the second quarter of 2007. The average inflation rate projected by the 520 surveyed businesses for the 12 months through June 2008 is 2 percent up from the 1.8% predicted in the previous survey. Some 84% of the companies participating in the survey expected inflation in the next 12 months to be within the price stability target range of 1% to 3% compared with 83% who expected this in the previous quarter. "Economic activity continued to grow at a slightly faster pace than in the preceding quarter and expectations for the next quarter are for continued rises in all industries," the central bank noted the quarterly report released Monday. "The rise in economic activity in the quarter encompassed principally the manufacturing, transport, and trade and service industries, while in the construction and hotel industries, the level of activity increased moderately." Sector by sector analysis showed continued large growth in manufacturing output as a result of increases in exports and domestic sales primarily in the hi-tech and mixed-technology industries, and to a lesser extent in the traditional industries. Construction companies reported moderate activity following higher increases in the preceding two quarters. "However, the leading index in the construction industry shows a rise in the probability of a slowdown in the next quarter," the report stated. Among the construction companies, large- and medium-sized companies expected activity to increase in the next quarter too, while small companies expected the level of their activity to fall. The transport and communications industry benefited from an increase in sales in services to Israelis and more moderate sales to foreigners compared with the previous quarter. Industry by industry analysis showed a rise in activity in the land and air transport industries, while the sea transport and communications industries reported a drop in activity. Hotels and tourism companies, for the first time since the Second Lebanon War in the third quarter of last year, registered signs of recovery reporting a rise in activity. Still, the number of bed nights of foreign tourists as well as bed nights of Israelis were slightly down in the second quarter compared with the corresponding quarter of last year, the report showed.