The Manufacturers Association and Histadrut labor federation both agree that the unemployment situation will be getting worse in the coming months.

Zvi Oren, who chairs the Manufacturers Association and the Federation of Israeli Economic Organizations, which represents the country's private employers, said a wave of layoffs following the High Holidays is expected.

The Employment Service this week reported that 16,084 Israelis were laid off in July, compared to 12,542 in June. The seasonally adjusted jobless rate rose from 5.4% in the last quarter of 2011 to 7% for the second quarter of 2012, according to the Central Bureau of Statistics.

Oren said a survey conducted by the Federation of Israeli Economic Organizations recently reflected difficulties that Israeli manufacturers were encountering in selling in Europe, which could force layoffs.

"It's true that the relatively strong dollar and euro are helping exporters' profitability," Oren said, "but on the other hand, there are two other more important trends - the lowly economic situation in Europe and the Israeli government policy of eliminating taxes and customs duties, which shows a surrender to last year's social protests. On top of that, there is the high cost of energy and water."

Histadrut Secretary-General Ofer Eini said yesterday: "The government did a lot to deal with increasing prices by opening markets to imports and encouraging fierce competition, but without taking the workers into account."

Eini cited the opening of the cellular telephone market to more competition , which led to layoffs among the long-time players as they cut costs.

The head of the Histadrut's economic and social division, Efraim Zilony, added: "Many industrial plants will reduce production if there is no positive turn in the situation with the economy in the countries of Europe." He said a large number of those being laid off are professionals and other skilled workers, such as engineers and staff from law and accounting firms.

Oren, who owns M.T.R. Railway Industries in Dimona, a manufacturer of freight cars, claimed that 80% of the country's industrial plants lack sufficient skilled laborers, including welders, carpenters and metal workers. There are others, however, who insist that the problem is seasonal, citing layoffs of outsourced workers by the schools.

"Thousands of school and nursery school teachers, assistants, guards and cleaning and maintenance staff employed at educational institutions every year get layoff notices at the end of June from the agencies employing them," said social activist Alex Tantzer.

"The employers make it clear to the workers they are dismissing that in two months, at the end of August, they will be rehired. For [the two months], they don't get a salary. They are entitled to go to the unemployment bureau, and can get unemployment compensation, but only if they worked 18 months straight, and many of them haven't," he said, calling for the end to the practice and instead having the staff employed directly by the education system.

There are also businesses that hire more employees in advance of the holidays, said Yaron Lubinski, a vice president at the Ortal personnel firm, pointing to food, furniture, home improvement and fashion retail chains.

"The problem," he acknowledged, "is that the wages paid these workers is NIS 24 to NIS 25 per hour, not much over minimum wage. Another problem is that it involves very temporary work, until the end of the holidays, and that's it." But he added: "I suggest that anyone who has been unemployed for a long time jump at getting one of these temporary positions. If he does well, there is a chance, albeit low, that he will be kept on permanently."