Overshadowed by expectations of a significant slowdown in economic activity over the coming year, almost half of local industrial companies have canceled employee pay increases and bonuses planned for next year. In light of the difficult economic situation, 46 percent of industrial companies have canceled employee pay hikes planned for 2009, and 40% of companies have canceled bonuses, according to a survey by the Manufacturers Association of Israel. The survey was conducted among dozens of factory personnel and human-resources managers at 50 industrial companies from all manufacturing sectors. The Manufacturers Association was pessimistic, saying the cost-cutting measures were only the tip of the iceberg. The situation at the companies and factories would continue to deteriorate, it said. Manufacturers Association head of labor and human resources Avi Barak said the survey also found that 48% of factories have already instituted a hiring freeze for 2009. The survey showed that 69% of the factories have reduced overtime and 22% have canceled shift work. In addition, 32% of the factories are restricting fuel use by company vehicles, 18% have replaced company cars with cheaper models and 8% have reduced the number of cars in an effort to reduce expenditures. Other cost-cutting measures include the cancellation of company-sponsored social activities and benefits. About 34% of the surveyed factories have reduced social events and benefits by canceling end-of-year parties and company outings.