Only Modest Growth for July Exports

Manufacturing exports from Israel in July of this year were up a modest 0.4%, compared to the month before, totaling $2.75 billion, but they still remained 23.2% lower than in July of 2008, the Manufacturers Association reported.

After an unprecedented decline in manufacturing exports that began in the third quarter of 2008, in June and July of this year, for the first time, we saw growth in most branches of industry, and particularly the metal and electronic components industries, says Ruy Ginel, director of the Manufacturers Association's economics division. Metals, minerals and mining, pharmaceuticals, communications equipment, and medical equipment were among the best performers.

But in spite of the changing tide, Ginel says that the recovery in manufacturing exports is a fragile one. "Israeli exports are waging a battle of survival, centered around the renewed weakening of the dollar," Ginel says. "Exporters could be hit hard by the injury to their competitiveness as a result of the strengthening shekel, including in industries that have seen some recovery," he adds.

Ginel also addressed exporters' need to offset losses resulting from the strengthening shekel by raising prices - a move that could cause them to lose some of their markets to stiff global competition. "Because of limited demand, competition is extreme, and Israeli exports need a comfortable environment, based on strong dollar and euro currencies," he said.

Figures for July show that metal industry exports were up 85.7% over June, to $213.7 million, just 6% short of levels in July of last year, prior to the economic crisis.

Exports in the mining and mineral industry rose 19.3%, to $96.6 million, in July, but are still 55.5% below July of last year.

The electronic components industry, comprised mainly of exports by the chip maker Intel, saw exports drop by 5% compared to June, to $420.5 million. Nonetheless, sales in the industry have more than doubled compared to July of 2008.

Textile and clothing exports were up 5% in July, compared to June of this year, to $73.3 million, but down 15% from July of last year.

Foodstuff exports in July totaled $57.4 million, similar to June, but 22.2% lower than July 2008 levels.

Although July exports in the chemicals industry remained unchanged from June, at $742.3 million, the industry continues to feel the pain. Export levels in July were still down 44% compared to July of last year.

Exports of furniture, paper and printing products in July of this year, at $30.3 million, were "just" 3.4% lower than in July of 2008, but were 7.4% below exports for the preceding month.

Pharmaceuticals industry exports, which is heavily weighted by Teva's performance, totaled $374.2 million, up 22.3% compared to June of this year, but 14.4% under the numbers of July of last year.

Overall, manufacturing exports in June-July 2009 increased by 3.5%, compared to April-May 2009, totaling $5.9 billion, contracting by a total of 20% between the fourth quarter of 2008 and May 2009.