The Israel Export and International Cooperation Institute today published figures showing a 5.7% drop in exports of goods, excluding diamonds, in the first half of 2016. Exports of goods hit their lowest point in the past six years, compared with the corresponding period in previous years. Exports of goods, excluding diamonds, totaled $24 billion in January-June, compared with $25.3 billion in the first half of 2015.
The Export Institute attributed the decline in exports of goods to highly concentrated sectors: pharmaceuticals, electronic components, and chemicals. In addition, there was a decline in Israel exports to key markets around the world accounting for a third of total exports, such as the US, UK, and China. Israeli exports of goods to countries like Turkey and India also fell.
The figures showed that Israeli exports of goods to the US dropped 3% to $5.4 billion in the first half of 2016, with exports of chemicals, electronic components, and pharmaceuticals leading the decline.
Exports of goods to the UK, Israel's second largest export market, fell by a steep 17% to $2 billion in the first half of the year. The Export Institute attributed the fall in exports of goods to this market to export of pharmaceuticals, which account for two thirds of all Israeli exports of goods to the UK. At the same time, excluding pharmaceutical exports, Israeli exports of goods to the UK were unchanged. The Export Institute also explained that some of the decline in exports of goods to the UK resulted from the devaluation of the pound against the dollar in dollar-denominated export deals, even before the full effects of the UK's exit from the European Union on the exchange rates are included.
Israeli exports of goods to China, Israel's largest export market in Asia, were also hard hit in the first half of the year, falling 8%. The decline was led by exports of minerals, which plunged 77%, compared with the corresponding period last year, and electronic components, in which exports fell 28%, compared with the first six months of 2015. At the same time, excluding the decline in these two sectors, exports of goods to China were up 9%, compared with the corresponding period last year.
Exports of goods to India and Turkey were also down: exports of goods to India totaled $580 million, down 9%, compared with the corresponding period in 2015, when exports of goods to India jumped 21% as a result of defense industries' deals with Indian defense agencies. These deals expired in the first half of this year, causing a fall in exports of goods to India.
Exports of goods to Turkey sank 35% to $625 million, on the heels of a 40% decline in exports of goods in 2015. On the other hand, exports of goods to some countries rose: to Spain (up 13%), Italy (4%), and Germany (3%).
The figures for exports of services, however, showed the opposite trend, with a 13% increase, putting total Israeli exports of goods and services in the first half of 2016 at $47 billion. The Export Institute attributed the rise in exports of services to higher exports of high-tech services.
Published by Globes [online], Israel business news - www.globes-online.com - on September 25, 2016
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