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Businesses in southern Israel have made a serious effort to continue operating during as warfare has raged on both sides of the border, but in fact most of the damage they have suffered has been due to a sharp decline in production. Some 1,000 firms within range of rocket fire have sustained about NIS 60 million in losses over the past eight days, estimates the Manufacturers Association. The figure factors in absenteeism and suspended production during rocket attacks.

Exporters add that the fact that the war began during Christmas vacation (among customers) gave them time to prepare for the repercussions of the war on businesses. Overseas clients returning to work yesterday found letters awaiting them from the Export Institute and companies, explaining that the war in the south of Israel won't hurt their import and export business with industries here.

Most firms in the south have remained open since the start of hostilities, operating according to instructions from the Home Front Command. But tensions, rocket attacks and the frequent need to evacuate to bomb shelters have left their mark. A few factories in Sderot and Ashkelon have closed down and reopened repeatedly, and one moved its operations to central Israel during the early days of the fighting.

According to data collected by the Manufacturers Association, 2,500 people showed up to work in industries in Sderot last week. The number dropped to 2,000 on Sunday, but by yesterday had risen to 3,000 - a number that constitutes 60% of all the town's industrial workers. In Ashkelon, some 80% of workers in factories that have been reinforced against rocket fire and 40% of the workers in unreinforced facilities showed up for work. Industrial workers in Netivot stayed closer to home yesterday, with 70% going to work as usual. Be'er Sheva, Kiryat Gat, Ashdod and Yavne all reported normal attendance of about 95%.