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Industrialists fear severe losses from strong shekel

December 7, 2006. Globes: Hadas Manor
 Today’s fall in the shekel-dollar exchange rate to NIS 4.18/$ will cost Israeli manufacturers $2.4 billion in sales in 2006 and 2007, estimates the Manufacturers Association of Israel. The estimate is based on a loss of $500 million to exporters on transactions in 2006, a 5% loss in profitability, and lost domestic sales caused by competition from cheap dollar imports.

Assuming that the shekel-dollar exchange rate remains at its present level, export losses in 2007 are estimated at $1.2 billion and domestic losses are estimated at $700 million.

Manufacturers Association president Shraga Brosh told “Globes” that low technology exports had zero growth this year, mixed-low technology exports grew by 4%, and high-tech exports grew by 18%. This proves, he said, a correlation between lower profitability in an industry and the industry’s vulnerability to a fall in the dollar.

The Manufacturers Association is calling on Governor of the Bank of Israel Prof. Stanley Fischer to again cut the interest rate by 0.25% for January, mainly because of its importance to export growth.

Previous Manufacturers Association calculations indicate that 10,000 jobs are lost for every $1 billion in lost exports.

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