Industrial exports plunge 12.1% in May

Lebanon’s industrial exports continued to fall in May compared to same month last year, a report by the Industry Ministry said Tuesday. Industrial exports fell to $255.3 million in May 2012, 12.1 percent lower than in May 2011, the report showed. Lebanon’s industrial exports have been falling considerably since April, when they slowed to $222.7 million, down by 20.8 percent from $281 million in March 2012. When aggregated, the first five months of 2012 saw a moderate decrease in exports. During that period, exports fell 2.6 percent to $1.286 billion, down by $31 million from $1.317 billion in same period of 2011. Economist Louis Hobeika of Notre Dame University told The Daily Star that soaring shipping costs and the rising value of the dollar against the euro are the two main factors behind the decline in exports. “Shipment through Syria has become increasingly difficult and much more expensive,” Hobeika said, highlighting that both land shipments and insurance fees have skyrocketed over the past few months. “The declining value of the euro compared to U.S. dollar also takes a heavy toll on [the] competitiveness of Lebanese goods. Given that Lebanon receives most payments in U.S. dollars, the cost of Lebanese goods have been increasing to major importers, particularly in Europe and the Middle East.” Since the beginning of 2012, the euro has depreciated by 5.35 percent against the dollar on international markets. In May, electrical equipment topped exports at $53.2 million followed by chemical and food industries, at $45.7 million and $35.5 million respectively. According to Hobeika, the Lebanese industrial sector should become more innovative to compete better on international markets. “Lebanese industry should invest more in innovative products and invest more in research and development. They should offer better wages to highly qualified individuals, who are leaving the country.” From DailyStar