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The damage to industry nearby Sderot and in the Western Negev caused by the firing of Qassam rockets in recent days is NIS 65 million, according to the Manufacturers' Association.

Of the 40 large factories operating in the area, 85 percent are suffering from employee absences since last week's increased hostilities, according to Yehuda Segev, the director general of the Manufacturers' Association

In the past two days 150 workers have abandoned their workplaces, Segev said. "If there is no improvement in the security situation in the Western Negev, the number of workers abandoning [their workplaces] will increase significantly at the beginning of next week, since additional workers and their families left Sderot this weekend to spend time somewhere safer. Most likely, they will not return to work on Sunday," said Segev.

He added that according to an association survey, 92 percent of industrial factories in the area have reported that they are unable to hire temporary employees to replace their regular workers who have left. Twenty-five percent of the industries have moved their offices to safer regions, and 25 percent have also said that they have seen a drop in local orders.

Since the middle of 2006, 90 percent of industries in Sderot and the Western Negev area have reported a drastic decrease in the number of customers, suppliers and service providers who have come to the factories.

"The government is marching confidantly toward the second Winograd Committee report concerning its failures in dealing with the future of industrial areas in Sderot and Sha'ar Hanegev," claimed Segev. The cabinet must define the Sderot and Western Negev region as "confrontation line" areas, as the North was defined during the Second Lebanon War.

This would allow workers in the region to be granted tax breaks. In addition the government must allocate NIS 50 million for protection of the factories to allow the 5,000 employees to work in a safe environment without having to miss work.