Israel's services exports fall for first time in 6 years

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Export Institute report shows service exports declined to $34.4 billion; tourism industry dropped 6%.

The Israel Export and International Cooperation Institute reported on Wednesday services exports fell during 2015 for the first time in six years. Services exports last year totaled $34.4 billion, a 2.8% drop in comparison to 2014.

The institute figures show the majority of the drop was sustained by the tourism industry, which fell 6% to $5.4 billion. The data points to low demand for services and highlight the difficult recovery of the sector since Operation Protective Edge in the summer of 2014; but it also notes the drop in the values of the euro and the ruble relative to the shekel which hurts tourism from Russia and EU states.

Israel Export Institute officials said the figures are in line with the data on inbound tourists and hotel proceeds. Business services exports which includes the export of high-tech services fell by 2% compared to 2014, down to $24.8 billion. Institute officials said the drop was tied to the sharp 11% decrease in R&D exports, which fell to $3.8 billion.

However, there was a 3% increase in the export of computer and software services during 2015 particularly notable given the drops in other sectors. The field accounted for $10.5 billion in exports that year, it includes the sale of software development services, the revenue of R&D centers in Israel, computing services, and outsourcing; it accounts for nearly 30% of Israels service exports.

Service exports, as a whole, account for 37.4% of total Israeli exports. Exports of services and products totaled $92 billion in 2015, when the latter fell by 9%.

Service export expanded relatively rapidly in the past few years and was the main driver of export growth during the continuing freeze in product exports, said Israel Export Institute CEO Ofer Sachs. The increase in computing and software export is one of the few sources of hope which stresses the crucial significance of high-tech to the Israeli economy and Israeli export.

Published by Globes [online], Israel business news - www.globes-online.com - on March 31, 2016

Copyright of Globes Publisher Itonut (1983) Ltd. 2016

 
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