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Israel Table of Contents



In 1987 the construction industry came to a turning point. Whereas in the preceding five years, the construction industry was characterized by a decline in output of about 2 percent per year, in 1987 the output grew at about 8 percent and returned to its 1984 level. The only subsectors where expanding business activity has led to increased demand for space have been electricity, transport, and communications.

The shrinking of the construction sector beginning in the late 1970s became much sharper in the 1980s. This contraction reflected not only an absolute decline in output but also a decline in productivity (over the preceding thirteen years, total productivity had been falling by an average of 2 percent per year). The share of the construction sector in the overall business sector declined from 19 percent in 1972 to 9 percent in 1987. In 1988 the construction period required for residential housing was twice as long as for most industrialized countries in Europe or for the United States.

Data as of December 1988