Introduction 1. General This publication presents the results of the Imports Destinations Survey for 2006. The survey was conducted by the Foreign Trade sector and is intended to classify the imports of commodities by use: For consumption (by households, non-profit institutions or the government), as production inputs and for capital formation – classified by the economic industries of the importers. The resulting classification is used as the basis for the yearly and monthly imports of commodities time series published regularly by the Central Bureau of Statistics. In addition, the results of the Import Destinations Survey for 2006 will be used in the preparation of input-output tables for the year 2006, which will be published in the future by the Bureau, and in the preparation of several of the national accounts time series published regularly. The Import Destinations survey for 2006 is the latest in a series of similar surveys conducted for selected years by the Bureau since 1965. The results of the surveys which were prepared for 1965 and 1972 were not published separately; rather they served as the basis for classifying imports according to various uses and for preparing input-output tables and national accounts. Structure of the publication This publication contains five introductory tables and five main tables that contain detailed data on production inputs and capital formation commodities, classified according to economic industry: The economic industry of the user (industry of destination) and the economic industry abroad supplying the goods (industry of origin). The introductory tables contain summarized information on the industries of use and origin of imports, and summarized information regarding the importers population in 2006 by importer type and imports value categories. The detailed tables contain data by industry of origin and industry of destination detailed at the division level (2 digits). 2. Main findings 2.1 Value of Imports In 2006 total imports of commodities (c.i.f.) amounted to $47,840 million, compared with $12,950 million in the previous survey year (1988). In the tables presented below the results of the current year survey were compared with those of the previous surveys. 2.11 Imports, by Use In table A, comparative data are presented of the results according to the main destinations of the imports. The data in this table show that in 2006 the portion of consumption of total imports (excluding ships, aircraft, diamonds and fuels) decreased to 13.1%, compared with 18.7% in 1988. The portion of capital formation commodities of total imports (excluding ships, aircraft, diamonds and fuels) decreased to 12.0%, compared to 20.6% in 1988. The decrease in the portion of consumption and capital formation commodities was balanced by an increase in the portion of production inputs. Table A - Imports, by Use Percentages Grand Total (excluding ships, aircraft, diamonds and fuels) Total imports for consumption Total production inputs Total imports for capital formation 1982/83 (1) 1988 2006 100.0 20.2 60.6 19.2 100.0 18.7 60.7 20.6 100.0 13.1 74.9 12.0 (1) Fiscal year beginning in April. 2.12 Imports, by Main industry of Destination In table B, comparisons were made of the import of inputs form production and the imports of commodities for capital formation. It should be noted that since 1993 the industries are classified according to the "Standard Industrial Classification of All Economic Activities 1993"1 from the data presented in the table, it is clear that the industrial industries were the main destination of the import of inputs (74.8%) and of commodities for capital formation (36.8%). About a quarter of overall imports of commodities for capital formation in 2006 reached the "Real Estate, Renting and Business Activities" main industry, influenced mainly by industry 710 – "Renting of Transport Equipment". This value reflects the major influence of the purchase of imported cars by leasing companies on the imports by uses data. 1 Standard Industrial Classification of All Economic Activities 1993, second edition, Central Bureau of Statistics. Technical publication number 63, Jerusalem, 2003. Table B - Production Inputs and Commodities for Capital Formation, by Main industry of Destination Percentages Total Industry Agriculture Electricity Water Building Trade Other industries Thereof: real estate, renting and business activities Production inputs 1982/3 1988 100.0 100.0 86.0 82.7 1.4 1.0 0.9 1.0 0.1 0.1 2.8 2.7 0.2 0.4 Commodities for Capital Formation 1982/3 1988 2006 100.0 100.0 100.0 47.0 43.6 36.8 6.9 1.3 2.3 1.9 4.0 2.1 0.6 0.3 0.2 5.9 3.6 4.4 1.2 0.8 4.7 2006 100.0 74.8 1.7 0.5 0.1 4.5 3.8 8.6 12.1 14.6 36.5 46.4 49.4 : : 4.2 : : 24.1 : symbolizes missing data 2.13 Imports, by Main industry of Origin In table C a comparison is made between the portions of the industries of origin abroad in the imports of goods to Israel. The table's data show that the weight of imports originating in the agricultural industries is 3.3%. Among the industrial industries, goods originating in the chemicals, metal, machinery and electronics industries accounted for about 57%, compared to about 50% in 1988. Goods from the chemicals, rubber and plastics industries were about 20%, compared to about 17% in 1988. Table C - Imports, by Main industry of Origin Percentages Main industry of Origin Grand Total (excluding ships, aircraft, diamonds and fuels) Agriculture Industry Mining and quarrying Food, beverage and tobacco industries Manufacture of clothing and made-up textiles Leather and leather products Manufacture of wood and wood products Manufacture of paper and paper products Manufacture of rubber and plastic products Manufacture of chemicals Manufacture of non-metallic mineral products Manufacture of metal products Manufacture of machinery Manufacture of electrical and electronic equipment Other industrial products 1977/8 1982/3 1988 2006 100.0 13.5 85.7 0.6 6.5 4.1 0.9 2.3 3.3 1.9 11.8 2.7 15.7 12.6 7.1 17.0 100.0 9.9 89.7 1.3 7.4 4.8 0.8 2.1 2.7 2.2 9.8 1.8 13.8 11.5 14.5 17.4 100.0 7.0 93.0 1.2 6.8 4.8 0.8 1.5 3.6 3.0 13.6 2.2 11.9 10.7 13.6 19.3 100.0 3.3 96.7 0.4 5.1 4.7 1.1 1.2 2.8 2.6 17.5 1.8 10.1 14.8 14.9 19.7 Imports originating in the food, beverage and tobacco industries constituted about 5.1% of overall imports. The textiles, clothing and leather industries accounted for 4.7%. 2.2 The Importers The findings of the current survey also reveal an increase in the number of importers and a rise in the level of concentration of the imports of commodities to Israel. The data in table D show that in 2006 there were about 62 thousand importers in operation, compared with about 35 thousand importers in the previous survey (1988( an increase of about 77%. About one percent of importers imported more than 72% of total imports. More than 70% of the importers imported about 0.5% of total imports. 579 importers imported more that $12 million in 2006. The data presented in table E shows that about 35% of the importers imported for personal use (direct imports) and their imports totaled about 63% of the total value of imports. Table D - Importers, by Import Size Group Importers Value of imports Number 61,874 % 100.0 Accumulated percentage 100.0 $ million 47,840.7 % 100.0 Accumulated percentage 100.0 $1-$24 thousand 43,911 71.0 71.0 244.9 0.5 0.5 $24-$240 thousand 10,340 16.7 87.7 862.4 1.8 2.3 $240$1,200 thousand 4,426 7.2 94.8 2,462.8 5.1 7.5 $1,200$2,400 thousand 1,096 1.8 96.6 1,846.1 3.9 11.3 $2,400$12,000 thousand 1,504 2.4 99.0 7,889.4 16.5 27.8 597 1.0 100.0 34,535.1 72.2 100.0 Total More than $12,000 thousand table E - Importers and imports, by Type of Importer Total Direct importers Indirect importers Importers Number 61874 21728 40146 % 100 35.1 64.9 Value of imports $ million % 47840.7 100 17815.9 37.2 30024.7 62.8 3. Definitions and explanations 3.1 Survey objective The objective of the Uses of Imports 2006 survey is to classify imported goods by use: personal consumption, fixed domestic capital formation and inputs for production in the various industries of the economy. This classifying of the goods is used in foreign trade publications and enabled the preparation of detailed input-output tables for 2006. 3.2 Survey population and investigation unit The estimates in this publication are based on data collected using three different processes. Direct importers were surveyed using an abbreviated questionnaire attached to the questionnaire of the Survey of Products and Materials in Manufacturing 2006. Commodities imported by indirect importers (those that were not included in the population of the Products and Materials in Manufacturing 2006 survey) were surveyed using a dedicated sample. The third process comprises the investigation of commodities using data received from the customs office coupled with data from other administrative sources. As stated, the importers list was divided in two groups: A. Direct importers – Are those who import commodities as inputs for production or for capital formation. The industry of destination of the commodities imported by direct importers, who, as mentioned, are manufacturers, was determined by the industry of the importer-manufacturer, according to the classification in the Business Register of the Central Bureau of Statistics. B. Indirect importers – Includes importers who engage in trade. Determining the industry of destination of the importer of goods in this framework was done through questionnaires and a direct approach via telephone, fax and, in some cases, a personal interview with the importers. These importers were asked who the customers who purchased the commodities were. Each importer was presented with a list of the commodities which he imported during the survey year. Investigation unit The investigation unit in the Imports Destinations Survey for 2006 is the commodity. As the commodities are freed by the Customs, they are entered in a Customs entry form that contains data such as the value of the commodities, the importer, country of purchase, country of origin and more. In the survey questionnaire, the unit of investigation (commodity) was presented in a consolidated form, after the value of all entry forms from an importer containing a specific commodity was summed up, even if the commodity was imported at different times during 2006. The sampling population of indirect importers included all the indirect importers active in 2006. A specific commodity (6 positions) was included only if the total value of its imports exceeded $50,000 in 2006. All commodities investigated using administrative sources were excluded from the sampling population. The final sampling population included 21,112 importers, including 100 importers sampled in the pre-test phase of the survey. The sampling unit was the importer and every importer provided data regarding all the commodities imported by him. The final sample of the survey was comprised of 1,100 importers sampled using the probability proportional to size (PPS) sampling technique. The size for every importer was calculated based on the total value of imports of the different commodities (representing the importance of the commodity), the value of each commodity imported by each importer and the representation of the commodities in the Products and Materials in Manufacturing 2006 survey. The sample included 476 pre-defined importers (including the 100 importers in the pre-test) and 624 probability sampled importers. From the sampled importers, 1,078 (98%) answered. One importer refused to answer, 8 were not found and 13 liquidated their business since the survey year. The non-response percentages were 0.09%, 0.73% and 1.18%, respectively. 3.3 Definitions and explanations Industry of origin is the characteristic industry producing the particular commodities which is listed in the customs tariff. The industry is classified according to the "Standard Industrial Classification of All Economic Activities 1993". No reference is made to industries in which the goods are actually produced. Industry of destination is the economic industry, based on the "Standard Industrial Classification of All Economic Activities 1993", according to which the direct importer or buyer of the imported goods is classified. This classification is also used in the input-output tables with a number of deviations (the list of industries in the input-output tables will be published at a future date)2. Type of use: intended for classifying the goods imported for main economic destinations and for other uses (not economic). The uses are as follows: - Private consumption Capital formation, by economic industry Production inputs, by economic industry Value of c.i.f imports is the value of import of goods, freightage and insurance, and imputation of wharfage and porterage expenses at Israeli ports (value for customs purposes). Stages in processing the survey 2 Inconsistences may occur between the data presented in this publication and the data presented in the Input-output tables 2006 due to corrections and updates added after the completion of the survey. 1. Check of completeness of material received from the customs authority and adjustment of the material to data published by the Bureau. 2. Preparation of the existing complementary information at the Bureau on the subject of classifications. a. Updating the index of the economic destination of the imported commodities, as it appears in the Bureau's Foreign Trade sector. b. Determining the industry of origin of the imported goods according to the foreign trade index and adjustment for input-output purposes. c. Classification of the direct importers according to the Business Register of the Input-Output sector. 3. Preparation of processing and investigation lists: List a: Small commodities – the value of whose annual imports is less that $50,000 List b: List of direct importers List c: Commodities for investigation using data from administrative sources – transportation vehicles, diamonds, ships, aircraft and energy. List d: Indirect importers for investigation. 4. Producing questionnaires to be filled out by those being investigated or by enumerators. 5. Enumerator interview – by visits to the company or by telephone conversations and fax communication. 6. Checking the field data and entering them into the computer. 7. Logical check of the data. 8. Updating the index of the economic destination of the imported commodities to include the uses of commodities that were previously defined as having a single use and are now defined as having multiple uses. 9. Preparation of statistical tables for the imports in various levels and classifications: Table 1 – Imports, by industry of destination. Table 2 – Imports, by industry of origin. Table 3 – Imports, by industry of destination in industry of origin. Table 4 – Imports, by industry of origin in industry of destination. 3.4 Limitations of the survey and reliability of the data The main limitations in collecting the data stemmed from a number of reasons: a. Importers whose address was not located or importers who had liquidated their business since the survey year. For the goods imported by these importers, the characteristic industry of destination was determined according to similar cases which were examined in the field. b. The sample used in the survey included 98% of the value imported by indirect importers. Even so, several commodities were not included in the sample. In such c. d. e. f. g. cases, the characteristic industry of destination was determined according to similar cases which were examined in the field. At times, the use of machinery and machinery parts was not clearly specified. In those cases, the machinery should be considered as a capital formation commodity if the importer uses it for production and as inputs for production if the machinery or parts thereof are used as parts in a bigger system sold by the importer. Wholesale importers who sold to retailers or other wholesale importers and did not know to report details about the final destination of the goods. In such cases, the characteristic industry of destination was determined according to similar cases which were examined in the field. The data which were received from Customs were in some instances, incomplete and it was necessary to correct them. An effort was made to include updates and corrections which accumulated since receiving the data from customs and up to the close of the survey. In some cases the information about the division by industry was an importer's assessment which was not based on his bookkeeping. The industry of the importer in the Business Register represents the industry were most of the economic activity of the business is conducted. At times, an importer is active in more than one industry. In such cases, the importer's industry may not represent the real use of all the commodities imported by him. Special Symbols : = unknown or not for publication : = a value which is less than half the unit in which data are presented or no cases n.e.c = not elsewhere classified n.s = not specified NIS = new Israeli sheqels Blank space = irrelevant as a result of the table's structure