Israel's Brand Damaged by Growing 'Quiet Boycott,' Industry Warns

Israeli industry is facing a severe challenge as a 'quiet boycott' of Israeli products expands in international markets, according to Avraham (Novo) Novogrotsky, the incoming President of the Manufacturers Association of Israel. He warns that this trend, coupled with the ongoing war, labor shortages, and a strong shekel, is damaging the 'Israel' brand and making products difficult to sell abroad. Novogrotsky stated that it's no longer a "quiet boycott," with overt legislative initiatives, political statements, and unofficial barriers hindering Israeli companies. Customers, distributors, and firms are increasingly hesitant to engage with Israeli suppliers, delaying deals or imposing unprecedented conditions, making the "Made in Israel" label a business obstacle.

The government acknowledges the issue and is attempting to assist, but Novogrotsky insists that more substantial measures are required. He calls for active government investment in export promotion, opening new markets, supporting affected companies, and bolstering the image of Israeli industry globally. He emphasizes that harm to exports directly impacts jobs, growth, investments, and Israel's economic resilience, framing it as a national challenge rather than solely an exporters' problem.

Despite facing a combination of challenges including severe labor shortages, high interest rates, and a significantly strengthened shekel, Israeli industry has shown remarkable resilience. Industrial goods exports grew by approximately 17% in dollar terms in the last year and a half, though much of this gain was eroded by the shekel's appreciation. Novogrotsky noted that while factories are selling more, their net returns are significantly lower. He also pointed to supply chain disruptions and export impacts during periods of conflict. He cautioned that without immediate policy changes and an improved business environment, the consequence will be fewer investments and job opportunities growing within Israel.

Novogrotsky highlighted that Israeli industry contributed approximately NIS 240 billion to business product in 2025 and employed nearly 400,000 workers, with an average salary 45% higher than the national average. He argues that investing in industry is not an expense but a growth engine, proposing a national program costing about NIS 2.2 billion annually that is projected to yield a net benefit of NIS 9.7 billion within five years. He urged the government to strengthen, not weaken, those who produce, export, and employ, especially when aiming to close the deficit.

The Manufacturers Association is not waiting for government action, having launched an AI center to help factories improve productivity and competitiveness. They also offer services in investment promotion, robotics, and automation integration, connecting high-tech firms with traditional industries and training workers. Novogrotsky's primary demand from the next government is the adoption and implementation of a long-term national industrial policy, providing clarity and certainty for factories that can handle competition but not policy vacuums.