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Economic News from Israel

  • Ra’anana-based Amdocs is in advanced talks with the Investment Promotion Center of the Ministry of Industry Trade & Labor to open an R&D center at the Nazareth High-Tech Park.  Their proposal is to employ 200 people from minority communities including engineers in northern Israel.  Amdocs has a major operation in Atlanta.
  • Caesarea-based Caesarstone Sdot Yam is planning to hold a Wall Street IPO to raise $150 million on NASDAQ.  The company, founded in 1987, manufactures quartz surfaces for countertops and interior surfaces, and has distributors throughout the Southeast.
  • Kibbutz Yizreel-based Maytronics has reported that the negotiations for the acquisition of its Adamant subsidiary have been halted.  The subsidiary was founded in 2005 as a start-up to develop technology for “green” disinfection that would complement the company’s other products that include electronic robots for cleaning swimming pools.  Maytronics’ US headquarters is in Atlanta.
  • General Electric will continue to invest in Israeli healthcare and cleantech and search for new opportunities and software in other areas, according to VP and Chief Marketing Officer Beth Comstock who visited Israel last month.  GE recently invested in Israeli start-ups Check-Cap and SolarEdge.
  • Google, with the support of the Ministry of Industry Trade & Labor, has launched a NIS 40 million project to set up free websites for 20,000 small and mid-sized businesses in Israel for one year.  A study of consultancy firm Halevi Dweck found that the cost of a basic website package in Israel, including set up, registering domain name, and storage , is on average double the price of other western countries.
  • Microsoft is setting up a start up incubator – Windows Azure Accelerator, the company’s first incubator in the world, and will be based at the company’s R&D center in Herzliya Pituah.  The name is derived from the aspect of activities that Microsoft is most interested in – cloud computing, internet, and mobile.  The incubator is a four-month program for start ups, and will include direction from top industry experts, including its own R&D center, and will offer the tools start ups need to get on the path to success.  Microsoft does not plan to acquire stakes in the participating companies.
  • Exports to Asia between October 2011 and January 2012 overtook exports to the US, according to the Israel Export and International Cooperation Institute.  The data showed that exports to the US fell 7% from the corresponding period in 2011 for a total of $2.9 billion.
  • Israel’s GDP grew by 4.7% in 2011, a slight downward revision from the previous estimate by the Central Bureau of Statistics.  Other figures included a 10.6% rise in imports, a 4.9% rise in exports, and a 16.2% rise of investment in fixed assets.
  • The average national gross salary of Israeli employees in 2011 was NIS 8,735, 3.8% higher than in 2010.  The non-financial sector was the biggest in terms of jobs with 1.98 million employees, and the public sector was in 2nd place with 548,700 employees.
  • Israel’s wine industry recorded a successful year in 2011 with exports growing by 5.5% according to the Israel Export and International Cooperation Institute.  The top 5 export destinations are the US, France, UK, Canada, and Poland.  There are currently 35 commercial wineries in Israel and over 250 boutique wineries.
  • Israeli venture capital funds raised $796 million in 2011 after raising nothing in 2010 and just $256 million in 2009, according to the IVC Research Center / KPMG Israel Somekh Chaikin report.  Microfunds raised a total of $87 million, nearly 11% of the total capital raised last year, and of the 14 funds raising capital, 8 are managed by newcomers in the Israeli venture market or organizations raising their first venture capital fund.
  • Israel’s unemployment rate fell to an all time low of 5.4% of the civilian labor force in the fourth quarter of 2011 from 5.6% in the preceding quarter, according to the Central Bureau of Statistics.  Participation in the labor force rose to 54.2% from 53.5% in the previous year.
  • Israel has kept its place as one of the largest exporters of know-how in technology in the world, according to a report published by The National Council for R&D at the Ministry of Science & Technology.  In 2010, Israeli companies exported $9.5 billion in technological services such as R&D and licensing agreements on patents and know-how.  This was a 3.4% drop from 2009, but a 17% rise compared with 2007.
  • Since it was founded in 2000, Taglit Birthright Israel has contributed more than NIS 2 billion to the Israeli economy through the provision of travel services, hotel overnights, food, training, security, visits to sites, flights, and more.  7,100 birthright groups have visited Israel, and 34,000 Jews participated in Birthright programs in 2011.
  • Israel produced better risk-adjusted returns than all other developed stock markets in the past decade as the technology-driven economy attracted global investors.  The Bloomberg Riskless Return Ranking shows the Tel Aviv-25 index returned 7.6% in the past 10 years after adjusting for volatility, the highest ranking among 24 developed-nation benchmark indexes including the ones in Hong Kong and Norway.
  • Israel’s natural gas reserves are worth $130 billion in non-capitalized values, according to the Israel Prime Minister’s Office.  This valuation is the basis for the sovereign fund for oil and gas royalties that will be set up, and the gas discoveries in Israeli waters could be double the known discoveries to date, including the Tamar and Leviathan fields.
  • Israel’s food exports from the US increased by 13% in the first 10 months of 2011 over the same period a year ago, from $135 million to $152 million, according to a report by $A.  One reason is the growing demand for American products by the estimated 500,000 US and Canadian citizens said to live in Israel, but sources indicate that ordinary Israelis like American cereals, deli products, dried fruits and some prepared foods.

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