Israeli exports of goods and services are projected to reach a record high of $165 billion in 2022, up 15% from 2021’s $143 billion in exports (itself a previous record), the Ministry of Economy and Industry announced in a new trade report on Wednesday.
The ministry said the data was gleaned from trade activity in the first half of 2022 as well as additional data forecasting by the ministry’s Foreign Trade Administration (FTA). In 2020, Israeli exports reached $114 billion, preceded by $117 billion in 2019, according to the figures.
The newest report showed that in 2021, as projected, the exports of “services” — a loose term that includes Israeli technology services like software and various research and development (R&D) solutions — exceeded exports of goods for the first time, with 52% for services and 48% for goods. Israel’s tech sector is partly responsible for this increase due to a bumper year for investments and exits (defined as merger and acquisition deals or initial public offerings of shares).
Tech exports including programming and software, IT consulting and IT services accounted for 46% of all services exports in 2021, according to the report, while scientific R&D and scientific and technical services made up 17% together. “Other” tech services by Israeli companies made up 4%.
Exports of programming services and research and development services grew by 26% in 2021, compared to 2020, according to the report.
Overall in 2021, services exports amounted to $74 billion and goods accounted for $69 billion following an “exceptional” growth rate of 17% over 2020’s commodities data, the report said. This includes diamonds, Israel’s strongest commodities subsector.
A majority of Israeli exports (not including diamonds) went to European Union countries (26%), followed by North America (25%) and Asia (22%).
Exports to Mideast and North African countries grew by 112% in 2021, compared to 2020, according to the report, with a majority going to Egypt (40%), followed by the United Arab Emirates (25%) and Jordan (21%).
FTA Director Ohad Cohen said in a statement that the “data for 2021 surprised us by being particularly exceptional compared to previous years, including years where there was no coronavirus [pandemic] and years of global economic crises.”
The figures in the services sector “are a result of unprecedented growth” in exports from the high-tech sector in recent years, and especially last year,” said Cohen.
Economy and Industry Minister Orna Barbivai said she offers her congratulations to “the Israeli companies and the government officials who are leading the Israeli economy to unprecedented heights,” adding that this work will surely “be reflected in the continued growth in exports in the current year and the years to come.”
The ministry said it expects a significant increase in services exports in 2022 as well, in industries like transportation, software and R&D. This would also be, in part, as a result of acquisitions of Israeli startups and companies.
Notable mergers and acquisitions (M&As) in 2022 include Intel’s intended purchases of Israel’s Tower Semiconductor for $5.4 billion and Israeli computing tech startup Granulate for about $650 million. Google also bought Israeli threat detection firm Siemplify (officially, Cyarx Technologies) for $500 million earlier this year, and Qualcomm, a major US tech company, acquired Cellwize Wireless Technologies, an Israeli maker of cloud and AI software that can speed up deployment of 5G networks, for around $350 million.
According to the report, commodities exports are also expected to increase in 2022 with bumps in sales of medical and optical equipment, chemicals and chemical products.