Manufacturing Growth Slows Amid Cooling Economy

Send in e-mailSend in e-mail

More news about the slowing economy came on Tuesday from the and the Israel Airports Authority, but the Bank of Israel’s state-of-the-economy index showed a somewhat cheerier picture.

The state statistics agency reported that growth of industrial production slowed to an annual rate of just 1.1% in the final quarter of last year, bringing the increase for all of 2012 to 3.7%.

The only sector to show significant growth was high technology, where the bureau reported that output grew 8.1% in 2012. But even in high tech there was a marked slowing in the fourth quarter, with production growing at a 2.3% annualized rate, compared to 21.5% in the third quarter.

Employment in industry followed the same trend, showing tepid 0.5% growth for all of last year and declining at an 0.4% pace in the fourth quarter. Even in high tech, employment growth was a meager 0.7% in 2012, with no growth at all in the final half of the year.

The report on tepid manufacturing growth came two days after the Central Bureau of Statistics said Israel’s gross domestic product grew at a 2.5% annual pace in the fourth quarter of 2012, its slowest in three and a half years.

Another sign of cooling economic activity came on cargo statistics from the airports authority, which reported that cargo traffic at Ben-Gurion International Airport was down 4.6% in January from a year earlier, to 22,200 tons.

Cargo traffic at the airport was down 4% in 2012 compared with 2011.

The Bank of Israel’s composite state-of-the-economy index, however, rose 0.2% in January, a higher rate than recent months, reflecting increases in imports of consumer goods and manufacturing inputs. It said an increase in the number of job openings relative to total employment also contributed to the rise.

But exports of goods and services fell in January. The indexes for the three previous months were revised downward, the central bank said, citing downward revisions in industrial production as well as changes to the index itself.

The Intel chip factory in Kiryat Gat, near Be'er Sheva.Credit: Haaretz

Click the alert icon to follow topics: