Israel's real estate slump has hurt other sectors of the economy that provide it with services: brokers, haulers, infrastructure, building engineers and architects. 100 independent architectural and engineering firms closed in 2001 – 5% of all firms in the sector. 500 firms were forced to lay off employees, and 300 of them are at risk of going out of business in the next six months.
Association of Engineers and Architects in Israel chairman Arie Shilo said engineering and architectural firms have laid off 5,000 employees in the past three years, 2,000 of them in 2001. Planning firms currently employ 12,000 people. Shilo said the main victims were new employees, including new immigrants. Shilo added that the lay-offs is harming the professional development of architects and engineers as they are unable to find appropriate work in their fields.
Shilo said the main reasons for the crisis in the sector were the decline in planning and design orders for infrastructure projects from the government and public sector, and near total halt in private sector construction projects. The recession and security situation worsened the crisis.
Asked whether there was any point in studying architecture in Israel, Shilo remained optimistic. Architecture is taught at Bezalel Academy of Art and Design, The Technion - Israel Institute of Technology and Tel Aviv University, and civil engineering is taught at The Technion, Tel Aviv University and Ben Gurion University of the Negev. More students learn overseas. 200 students complete architecture studies every year in Israel, but supply outstrips demand, with few graduates being hired.
Head of Tel Aviv University David Azrieli School of Engineering Prof. Elinoar Barzacchi disagrees with Shilo’s conclusion, claiming most students are hired in Israel, with only some emigrating. She said it was still worthwhile to study architecture, although there was no point in opening new schools or colleges for the subject.
Barzacchi criticized the government for not investing in infrastructure and education during the current crisis.
Published by Israel's Business Arena on 3 March 2002