Services exports data for January – December 2019

2nd March 2020

Bottom line:  Service exports recorded yet another positive year in 2019, with high-tech exports leading the charge – as usual – but tourism revenues also making a positive contribution. Scientific research, conducted by research centers established by foreign multinationals, and sales of start-up companies, were the areas of strongest growth.

Specifics:

  • Total service exports for 2019 amounted to $55.4bn, a rise of 10.6% over 2018. Excluding start-up companies, the rise was 9.7%, to $52.4bn.
  • Within this total, the great majority comes from ‘other business services’, which climbed 13.3% in 2019 to total $43.4bn.
  • This category is dominated by two sectors: high-tech services, such as computer programming, data processing, consultancy, etc. AND scientific research. The first category rose 12.6% to cross the $20bn mark for the first time.
  • Scientific R&D revenues soared 33% to reach $9.2bn, highlighting the central role Israeli R&D centers play in a growing number of industries.
  • Revenues from ‘travel services’ gained 4% to over $7.5bn, another milestone, reflecting a record level of incoming tourism.
  • However, transportation services slipped marginally, with ‘cargoes between foreign ports’ – in practice, the operations of Zim Integrated Shipping Services – stable at $2.6bn, reflecting weakness in global trade.
  • The start-up sector had a banner year, with sales of companies and other exceptional transactions jumping 32% to just over $3bn.

Outlook

Services exports have been the main source of growth in the Israeli economy for over two decades. However, they are now threatened by the impact of the coronavirus crisis, which has already forced the travel and tourism sectors to reduce operations and cut staff. The high-tech sectors are also vulnerable on several fronts and the data during 2020 will reveal how severe the damage might become.

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