Israel's industrial exports slowing down

Report prepared by the Manufacturers Association of Israel (MAI) shows that Israel's industrial exports, fell by US$400 million in the period July-August 2013, with high-tech exports leading the slump. Industrial exports in July-August totaled US$3.46 billion, 11% lower than in the second quarter.

The MAI noted that high-tech and mixed high-tech industries suffered the steepest decline in exports: chemical exports fell by 20%, pharmaceuticals exports fell by 30%, and electronics exports fell by 16%. Total exports by these three economic sectors was US$1.41 billion a month in July-August, US$190 million less than the monthly average in the second quarter of 2013.

Exports of metals (-16%), food and beverages (-10%), jewelry (-20%), and textiles (-3%) also fell in July-August, but exports of refined oil products (+75%) and minerals (+10% ) rose sharply. Zvika Oren Manufacturers Association president noted that "The plunge in exports points to the drastic loss of Israel's competitiveness in foreign markets. This is serious, because the growth of Israel's economy, which is a small economy, depends on exports. When exports are hurt, economic growth is affected," He called on the government and the Bank of Israel to take urgent steps to help exporters and to "get exports back on track."

Last month the Israel Export Institute forecast that Israel's exports, a key driver of economic activity, are be unchanged in 2013 at about US$92 billion. The institute noted that 'The downward revision is mainly due to a decline in the forecast for growth in global trade, the decrease in commodities prices and a stronger shekel against foreign currencies,' Exports account for about 40% of Israel's economic activity, with a third going to recession-hit Europe. The United States is Israel's second-largest trading partner.