Israeli exports increased to about $140 billion in 2021 and hit a record high, an increase of close to 20% compared to about $114.3 billion in 2020, according to estimates by the Foreign Trade Administration at the Ministry of Economy and Industry.
For the first time in Israel’s economic history, exports of services exceed exports of goods with a 51% to 49% ratio, while the exports of goods are also on the rise.
The leading sectors in the export of goods are automation and electronic equipment, products of the chemical and pharmaceutical industries, and optical and medical equipment.
Israel’s top exporting destinations are the US, China, Netherlands, Turkey, and Germany.
The growth trend that exports have been experiencing since the beginning of the year strengthened as the year progressed. According to conservative based on various calculations of data for the first three quarters of the year, the Foreign Trade Administration expects that at this growth rate, exports are expected to approach the $140 billion mark.
The two most significant trends that contributed to the change in the balance of power between goods and services are a significant increase in the high-tech industries in Israeli exports – exports of programming services and research and development services that are not start-ups, which grew by 25% and 15% respectively, and the significant increase in transportation services exports that jumped this year by 138% percent.
However, the Ministry of Economy clarified that with regard to transportation services, the increase is due in part to the jump in transportation costs worldwide and the fact that the year to which the data is compared is the year in which the Coronavirus hit supply chains worldwide.
At the same time, exports resulting from the sale of start-up companies also jumped by 257% and these trends led to the overall growth of about 30% in the export of services.
In the commodities sector, a recovery trend can be seen after several years of stagnation with a growth of about 15%, an increase that has not been seen in recent years. A particularly significant recovery in the commodities sector was recorded in diamond exports, which grew at a rate of about 65%, after years of contraction and crisis in the industry in Israel.
Excluding diamonds, exports of goods in 2021 grew by about 13% compared to 2020, and exports of goods grew in almost all sectors.
From a geographical point of view, looking at the exports of goods not including diamonds, it can be seen that the majority of exports, 39%, are directed to European markets, 33% to American markets, and about 25% to Asian markets.
Ohad Cohen, Director of Foreign Trade Administration at the Ministry of Economy and Industry, stated Monday that “the year 2021 will break records in Israeli exports and its components. Whether we reach the $140 billion threshold or not, this is an all-time high in exports, which was slightly halted in 2020 due to the Corona pandemic.”
He noted that the exporting sector showed “an impressive recovery” in late 2020 and even more so in 2021, both in the export of goods and services.
“It is important to remember that the last peak in exports was in 2019 when exports totaled about $117.5 billion, so this is not only a correction after the year of Corona but a significant growth in Israeli exports. This growth comes despite the fact that the tourism sector has not returned to full activity in the past year, and although Corona’s challenges in the target markets have continued and even increased recently,” he added.
In 2021 exports of goods, excluding the diamond sector, experienced impressive growth in many markets: exports to Europe increased by about 7%, with an emphasis on Belgium with a 37% increase, Cyprus with 49%, Greece with 25%, Ireland with a whopping 517% increase, Italy with 74%, Spain with 38%, and Turkey with 28%.
Exports to Asia grew by about 15% and especially exports to India with a 54% growth, Hong Kong with 22%, South Korea with 47%, and Taiwan with 36%.
Exports to America grew by about 13%, especially exports to the US with 14%, Peru with 31%, Colombia with an 18% increase, and Ecuador with 49%.
Exports to Africa grew significantly by about 37% with an emphasis on Egypt with 46%, Morocco with a massive 192% growth following the signing of the Abraham Accords a year ago, South Africa with 27%, and Nigeria with 101% growth.