Survey: Business pessimistic about growth

Bank of Israel: Economic activity expanded last quarter.

Business activity continued to expand in the second quarter of the year led by domestic sales, but orders for the third quarter indicate a modest rate of growth in the manufacturing, construction and hi-tech industries, according to the Bank of Israel’s companies’ survey for the second quarter of 2010.
“The expansion was reflected in the increase in the net balance of domestic sales, while the net balance of exports increased only moderately,” the central bank reported Wednesday. “Most of the increase was in large companies, while medium and small companies reported a steady level of activity. Companies expect a modest increase in activity in the third quarter, particularly in export sales.”
The survey of 638 companies found that activity continued to increase in the business- services industry, due to a rise in domestic sales, while exports remained unchanged.
Trading companies reported an increase in the volume of sales in the second quarter at a slower rate than in the first quarter.

Looking ahead to the third quarter, companies forecast a faster increase in sales and a rise in the number of employees.
Hotels reported a continued rise in activity in the second quarter year on year after a contraction in 2009. They expect further expansion in the third quarter.
Building companies reported stability in construction work in the second quarter, while other data indicated there was no change in the volume of building starts, a small increase in the volume of building completions and a reduction in the number of employees. The industry’s prices increased mainly as a result of a continued shortage of land. Expectations for the next quarter were for a modest increase.