Trade data for January-February 2017

13-03-17

Bottom line:  At the headline level, the trade deficit widened sharply in January-February. However, the detailed picture is much more complicated, even confused, as the points below illustrate. Overall, the export sector is still weak, but less so than last year, while imports are distorted by several short-term factors. The impact of the recent sharp rise in the shekel’s value has not yet been felt.

Specifics:

  • On a seasonally-adjusted basis and excluding diamonds, ships and aircraft, the trade deficit for January-February 2017 was $2.5bn., compared to only $1.5bn in the same period last year.
  • Total imports rose 4.3%, but this masks very different trends: fuel imports soared by $500mn. or 63%, reflecting the recovery in energy prices over the past year, while investment goods’ imports rose 9%.
  • Investment goods themselves saw conflicting trends: imports of cars plunged by 44% from Jan-Feb 2016, but imports of machinery jumped 33%.
  • Consumer goods’ imports were similarly mixed: vehicle imports slumped 37%, in reaction to the huge level of imports in December, while imports of consumer non-durables were up across the board.
  • Exports saw an overall rise of 2.9% in Jan-Feb, but this was due almost entirely to much higher diamond exports, whilst manufacturing (down 5%) and agricultural exports (down 3.4%) were weaker.
  • High-tech exports were 14% lower than in Jan-Feb 2016, with both the pharam and the air and space sectors showing weakness, whilst electronics was stable.
  • Medium-high and medium-low tech sectors both posted gains, The chemicals sector stood out, with the recovery there beginning to take root after a prolonged decline. Machinery and equipment, base metals and metal products also posted strong gains.
  • On a trend basis, both imports and exports are displaying weakness.

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