Abstract
In recent years, Israel’s construction industry has experienced a
significant recovery, following many
years of slow growth. The increased
participation of the private sector, along with rising investor
confidence
in the county’s infrastructure sector, and the growth in other sectors
of the economy have all
been key factors for this positive development.
However, the attack to the Gaza Strip in late December
2008, in addition
to Israel’s heavy dependence on the US economy, may have negative
implications for
the country’s economy and, hence, the
infrastructure sector. In BMI’s Israel Infrastructure Report 2009,
we forecast 9% real growth for the construction, and by extension,
infrastructure industry for 2009.
Major projects are currently underway or
in planning stage that will be a significant contribution to
Israel’s infrastructure. In addition, Israel’s finance minister
proposed in November 2008 a US$ 5.5bn plan
to boost the economy and
mitigate the effects of the global credit crisis. Spending on infrastructure
is one
of the main pillars of this plan.
Furthermore, several major
construction companies are active in the country. Among these are the
Housing and Construction group, which is Israel’s largest construction
player, with extensive
experience in building and infrastructure projects
in Israel and worldwide. The Ashtrom Group is also
one of Israel’s
leading private development and manufacturing companies, and is involved in a
wide
range of construction and related activities, both locally and
overseas. Other players include Africa-
Israel Investments and
Gazit-Globe. Africa-Israel Investments is currently broadening its investments
in
overseas real estate, Israel’s residential real estate and
income-producing properties. Gazit is a leading
Israeli real estate
investment company focusing on the acquisition, development, management
and
renovation of neighbourhood and community shopping centres in
high-growth areas in Israel, the US and
Canada. SGS Building is a
privately-owned real estate development, construction and civil
engineering
enterprise while PBC is a subsidiary of the IDB Development
Corp, and is one of Israel’s largest real
estate concerns.
Israel ranks in third place in BMI’s Business Environment Rating for the
Middle East and Africa region.
However, increased war expenditure often
leads to significant reductions in the budget allocated to other
sectors
of the economy, which, along with frequent labour shortages, may cause delays
to crucial
infrastructure projects.
Overall, with the global financial
crisis still unfolding and with the recent military attack to the Gaza
Strip, our overall view for Israel must be a cautious one. For 2009, we
forecast that unemployment will go
slightly down to 7.2%, while real GDP
growth is forecast to decrease significantly to 2.9%.
| 
View Cart
