Figures published today by the Israel Export and Industrial Cooperation Institute show that the rising trend in exports of goods from Israel continued in November 2016-January 2017. Exports of goods, excluding diamonds, totaled $12.3 billion during this period, 2% more than in the corresponding period in the preceding year. Excluding the sharp downturn in exports of electronic components over the past three months, Israeli exports rose 9%.
The Export Institute regards these figures as further evidence that Israeli exports are recovering, following a prolonged period of stagnation and decline that began in 2012. The Export Institute says that recovery is taking place despite a steep decline in exports of electronic components from Israel, which totaled only $980 million in November 2016-January 2017, 43% less than in the corresponding period in the preceding year. This decrease was caused by the upgrading of US manufacturer Intel's main fab in Kiryat Gat, which includes setting up an advanced innovative production line.
"This decrease will be followed by an increase, so this figure is no cause for alarm," Export Institute chief economist Shauli Katznelson told "Globes." "We believe that exports of electronic components will recover already in the current year."
The Intel fab upgrade is scheduled for completion toward the end of the year, when the US corporation begins operating its new production line there. It is believed that the new line will produce 17-nanometer silicon wafers. Chip industry sources predicted that Intel's exports from Israel would rise significantly, starting in early 2018.
Medical equipment exports leap 46%
The increase in exports of goods in November 2016-January 2017 follows a 1.8% rise in July-October 2016. The Export Institute says that the trend continued in November 2016-January 2017, with key export sectors substantially increasing their volume of activity. Pharmaceutical exports were up 8% to $2 billion during this period, and exports of electronic and computer equipment and optical devices used for medical purposes shot up 46% to $2.8 billion. Exports of machinery and equipment, including equipment for agro-technology, renewable energy, irrigation systems, robotics, food, and printing, grew 28% to $1.6 billion.
Rubber and plastics exports were up 3.5% to $475 million, electrical equipment exports rose 4% to $305 million, and food and beverages exports rose 4% to $270 million, compared with the corresponding period in the preceding year.
Exports of diamonds jumped 15% to $1.9 billion in November 2016-January 2017. The Export Institute said that exports of goods including diamonds totaled $14.2 billion during this period.
In December, the Export Institute predicted that exports would increase by 6% in 2017, judging by the state of the global markets, which are showing signs of recovery. According to Katznelson, "The global economic is recovering; it is already showing in the numbers. It should therefore be a good year for exports. We see a positive trend in the markets, with the euro stabilizing against the dollar, after the fall in the euro-dollar exchange rate influenced the volume of exports last year. Surveys among company procurement managers we conducted in recent months show that they are optimistic about the emerging state of the markets."
One of the surveys asked procurement managers in exporting companies about the effect of the US election results, including the election of Donald Trump, on trade relations between the US and Israel. Katznelson commented, "There is no real concern among the companies about the election of Trump. Some believe that he will be good for Israeli exports. One opinion holds that a tougher US trade policy towards some countries will benefit Israel and lead to closer trade ties. We are encouraged by figures confirming our export forecast. For the first time since 2012, the export trend is upward, rather than staying in one place. The trend shows that the crisis in the global markets is behind us."
Published by Globes [online], Israel Business News - www.globes-online.com - on February 16, 2017
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