MAI: investment in machinery and equipment to slow by 15%-20% this year

The MAI called upon the government to reconsider its policy and reinstall the accelerated depreciation regulations in 2008
 
The Manufacturers' Association of Israel (MAI) reported last week that following the government's decision to remove the accelerated depreciation rates at the beginning of 2007, manufacturers expect a 15% to 20% slowdown in the growth rate of investments in machinery and equipment this year.
 
Dafna Aviram-Nitzan, director of Economic Research and Strategy unit at the Manufacturers' Association, noted that "The fact that government decided to discontinue the accelerated depreciation regulations brought about the rate of growth of investments into machinery and equipment from 29% in 2006 to an expected growth rate of 10% to 15% this year".
According to figures published by the MAI, the Israeli industry invested this year NIS 16.5 billion in imported machinery and equipment.
 
The MAI called upon the government to reconsider its policy and reinstall the accelerated depreciation regulations in 2008. The MAI added that the accelerated depreciation is needed in order to provide incentives to local factories to increase investment in machinery and equipment, which in turn would boost competition and accelerate industry growth.
 
During the first six months of the year, investments in machinery and equipment grew by a rate of 17.8% to a volume of NIS 7.7b.