Bottom line: The trade deficit for April posted another significant deterioration, widening to US$2.2bn on an unadjusted basis and to US$1.87bn on a seasonally-adjusted basis and excluding ships, aircraft and diamonds.Unlike in March, the data cannot be explained as offsetting the previous month’s trend; instead, April amplifies and confirms the fears we voiced regarding the March data, suggesting the underlying trend in goods’ trade has turned negative this year.
- As in the budget data, so too in the trade data: because of the distortions stemming from Passover falling in March in 2013 and in April this year, comparisons between April alone are of limited value. It preferable to look at the period January-April as a whole.
- The deficit for the first four months of the year, in both unadjusted and seasonally- adjusted measures, expanded by some US$900mn over the parallel period of 2013.
- Imports are beginning to show some signs of weakness. The trend data show that after rising steadily until January 2014, all the main categories of imports — raw materials, consumer goods and investment goods — have turned down in recent months.
- The same trend is apparent among exports — but it is more pronounced here. The weakness stands out in “medium-high” and “medium-low” sectors, in terms of their technological intensity.
- High-tech exports have been volatile but, four months into 2014, it is clear that although the underlying level of these exports has been stable, the strong upward momentum of the second half of 2013 has been lost.
- Ironically, low-technology industries continue to expand, led by the textile sector.
Trade deficit, Excl. ships, aircraft, diamonds and fuels
Trend data (Million $)