• Abstract and Figures
• Public Full-text

CHAPTER XV TRANSPORTATION, COMMUNICATIONS, AND TOURISM 1. Main Developments This sector's rate of product growth slowed considerably in 1974: 4­5 percent as against 9­10 percent in the ifrst three quarters of 1 973 and an annual average of over 13 percent for the period 1969­72.' The major developments affecting the sector in 1 974 were the economic slowdown in Israel and throughout the world; the drastic rise in fuel prices following the energy crisis; the change in the defense establishment's levelof demand for various transportation services following the war; and the decline in tourism. It is dififcult to measure the effects of these developments accurately in quantitative terms, particularly for those transportation subsectors in which the negative consequences were minimized to some extent by various compensating factors. The most important of these factors was services rendered to the defense establishment, both as a result of the reserve call­up and in line with normal requirements. In addition, both the war and its aftermath and the security conditions prevailing in the region created a situation in which Israeli air and sea transport enjoyed a high degree of monopoly and preference. In the ifeld of passenger conveyance­ principally buses and taxis­ trafifc on regular routes dipped considerably. The mobilization of the reserves at the beginning of the year, the decrease in real income, and the slackening of private consumption, all led to a smaller volume of travel both by private car and by public transport. Complementing this dip in demand was a decline in the supply of transportation services in the ifrst quarter of the year when they were operated at only part strength. Fuel price hikes in 1974­ which averaged12 5 percent for gasoline and about 1 74 percent for diesel fuel­ contributed signiifcantly to higher vehicle operating costs (as well as to increased passenger fares and freight charges). They also led to reduced fuel consumption (in spiteof the growthof the vehicle lfeet).2 ' Changes in the gross national product originating in this sector were calculated on the basis of input­output coeiffcients for 1 968/69. The year­to­year changes in the output of the various branches serve as an indicationof the change in their product. 2 There was also a trend away from 93 octane petrol towards the cheaper 83 octane brand. CHAPTER XV, TRANSPORTATION, COMMUNICATIONS, AND TOURISM 37 5 ­TableXV1 CHANGES IN REAL OUTPUT, PRODUCT, AND PRICES OF THE TRANSPORTATION AND COMMUNICATIONS SECTOR, < z BY BRANCH, 1972­74" )percentages) Annual increase or decrease (­) < Output Prices < GNP Z z originating 1973 c < in sector in Weight in 1972 (at revenue. Jan.­ Entire 1 968 prices) 1972 1972 Sept. year 1974 1972 1973 1974 Domestic services 77.0 56.3 12.3 7.5 0.9 2.9 9.9 15.7 32.8 Land transport 45.2 37.0 7.9 6.5 ­1.5 ­0.6 13.7 13.5 37.7 \0 Buses and subway 13.4 10.6 5.8 3.5 ­1.0 0.6 19.0 11.5 35.0 ■A Taxis 4.7 4.0 5.0 7.0 6.0 ­9.0 17.4 13.5 42.8 Trucks 26.3 21.5 9.8 8.0 ­3.4 0.5 11.0 14.6 37.9 Railway 0.8 0.9 ­0.6 3.4 5.6 ­1.2 5.5 10.2 44.4 Other 31.8 19.3 20.9 9.6 5.5 8.1 3.3 19.7 25.9 Oiland "gas pipelines 8.4 2.4 43.1 27.3 ­6.8 3.5 6.9 2.0 26.3 Domestic air services 0.6 0.7 2.6 1.7 7.3 ­6.5 18.0 19.0 42.8 Posts and telecommunications 22.8 16.2 19.0 7.6 7.2 9.2 2.3 22.025. 3 International services 23.0 43.7 9.5 13.5 12.8 9.6 16.0 9.0 43.3 Shipping and ports 14.9 31.2 7.6 16.6 11.7 13.9 18.4 11.1 47.8 Shipping 6.2 25.3 7.6 17.9 12.7 12.6 20.2 8.0 54.0 Ports 8.7 5.9 7.5 10.7 7.3 18.9 11.3 25.1 24.9 Civil aviation and airports 8.1 12.5 14.3 6.3 15.6 ­1.5 10.4 3.9 29.8 International aviation 6.7 11.5 14.3 5.5 15.8 ­1.2 10.3 3.4 30.7 Airports 1.4 1.0 12.0 16.4 13.7 ­4.6 13.5 9.7 19.3 Total output at market prices" 100.0 100.0 11.1 10.1 6.1 5.8 12.5 12.6 37.9 Estimated change in the sector's product. at current prices 13.0 9.6 3.1 4.6 " Revised data for 1972­73. Including the defense stamp duty on bus, railway, and postal services; excluding bus and shipping subsidies, the deifcit of the railway, and ;he, ^j^ tax on air and sea travel. "* ­^*? It should be noted that the gradual adjustment of relative prices over time, and the various institutional arrangements for refunding travel expenses, eventually reduced the initially signiifcant effect of the jump in fuel prices. The slump in tourism in 1974 also considerably depressed demand for transportation services (including inland air transport). Transportation carried out for the army at the endof 1973 and the beginning of 1974 helped, however, to avert an even steeper decline in the output derived from passenger conveyance. During the ifrst nine months of 1974, the output of land freight (mostly trucking) dropped markedly, but for the year as a whole there was scarcely any change (including the inlfuence of the mobilization of trucks during and after the war). Behind the slowdown in output growth were declining investment in building and earthworks and a deceleration in other branches of industry not directly connected with building. Towards the end of 1974 a surplus of trucking capacity was discernible. It should be noted that a great partof the productive capacityof the trucking branch was mobilized at the end of 1973, and to a lesser extent at the beginning of 1 974, and it was thus dififcult to estimate output accurately. Changing patterns of income and real consumption were relfected in the real output (in physical terms) of the communications branch, which experienced a slowdown in1974. 3. In spite of the reduction in the numberof new applications for telephones during 1974, the accumulated excess demand continued to rise and exchange utilization declined due to the inadequate expansion of the telephone network. No change (let alone an acceleration) was registered in shipping output during 1974,4 despite an increase in the volume of import cargoes handled (including imports for the defense establishment); this is explained by longer routes and by changes in the composition of the cargoes carried. These factors, together with the worldwide success of the "liner trade"­ which accounts for a relatively high proportionof the branch's output­ led to comparative prosperity in 1974 as against a general drop in tanker and bulk cargo freights. It should also be noted that Israeli tramp shipping operates on the basis of long­term contracts that protect the branch against sudden swings in charter rates. The effects of the slump in world tourism in 1974 (and in tourism to Israel) J The physical data relating to the output of this branch in 1973 and 1974 are more reliable than the data on revenue in termsof constant prices. ■* As noted in the 1973 Annual Report, the measurement of this branch's real output involves statistical problems, particularly the construction of price indices. It would appear that in the ifgure for 1 973 the increase in real output is overestimated. The price index for 1974 has been calculated on the basisof provisional partial data. CHAPTER XV, TRANSPORTATION, COMMUNICATIONS, AND TOURISM 377 coupled with the 1974 aviation crisis were offset for El Al by the considerable increase in real output resulting from its freight operations immediately following the Yom Kippur War, and to a lesser extent throughout 1974. El Al's real output from passenger traiffc also rose, in spite of the overall drop in air traiffc to Israel. El Al was able to achieve a larger share of Israel's incoming and outgoing traiffc at the expense of other airlines, and, therefore, for the year 1974 as a whole, El Al's output dipped by as little as 1 percent. The tourism slump affected not only domestic transportation and aviation, but also seriously cut the hotel business as well as other enterprises serving the tourist trade. In the year reviewed, 624,700 tourists arrived in Israel,' and the direct income from tourism (based solely on data of foreign currency exchanged by banks) reached $ 195 million (15 percent below the 1973 ifgures). The contribution of tourist service exports declined in 1974 and accounted for only 11­12 percentof all service exports ; in terms of added value, however, the percentage was higher. Output prices rose by an average of about 3 8 percent for the branch as a whole during 1974­a somewhat lower increase than that of the general price level. The 38 percent rise was inlfuenced, however, by the prices of services rendered directly to the armed forces which brought down the overall average. It should be remembered that the rates for the majority of the country's inland transport services are ifxed by government regulation.

Load more

  35

Copy Link