Exports increased by an annualized 11.3 percent in trend figures in the months May to July after falling by an annualized 15.9% during the February to April period.

In July, total exports of goods out of which 82% are industrial exports amounted to $3.6 billion in July, and imports totaled $4.2b., causing a trade deficit of $600 million. In the first seven months of the year the trade deficit averaged $400m., down 63% from the monthly average of $1.1b. in 2008.

Hi-tech exports, which make up 52% of industrial exports, rose by an annualized 10.1% over the past three months after growing at a rate of 11% in the February to April months. Within the sector growth was driven by an annualized 136.6% rise in exports of electronic components in the May to July months mainly due to the start of the new Intel plant in Kiryat Gat. Exports of communication, monitoring, scientific and medical equipment increased by an annualized 8.5% during the same period.

The steep plunge in exports of the mixed hi-tech goods, which make up 27% of industrial exports, saw a recovery in the last three months as the decline slowed down to an annualized 17.6% compared with the sharp fall of 49.4% in the months February to April. Meanwhile exports within the mixed-traditional technology sector rose by an annualized 12% during the months May to July after falling by an annualized 40% during the previous three months.

At the same time the big downturn in imports of goods seen since the beginning of the year also slowed over the last three months. Import of goods fell by an annualized 5.4% in the months May to July, after falling by an annualized 37.1% in the previous three-month period.

Imports of raw materials fell by an annualized 0.9% during the last three months after falling by an annualized 39.5% in February to April, while the fall in imports of investment goods (excluding ships and planes) slowed to an annualized 22.3% in May-July, after falling by an annualized 47.7% in February-April.

Imports of durable goods rose by an annualized 20% in May-July, mainly because of a 30.7% annualized increase in vehicle imports, ahead of the introduction of the green taxation in August. Imports of consumer goods, including durable goods, rose by an annualized 7.2% in May-July, after falling by an annualized 14.9% in February-April.

According to the most recent update report on the state of the economy published by Israel Manufacturers' Association on Wednesday exports of goods and services, not including diamonds, are expected to decline by 13.2% in the full year of 2009 after growing at a rate of 7.6% in 2008.

Ruby Ginel, deputy head of the economics and regulation division at the Israel Manufacturers' Association, said that despite the positive impact of the new Intel plant, industrial exports are forecast to retreat by 13% this year. Neutralizing the impact of the Intel plant, industrial exports were poised to fall by close to 20% in 2009.