Israeli Industry Faces Canceled Deals Amid International Hesitation
Translated & summarized from Al-Shams by baba
Israeli companies are facing international business challenges, including delayed deals and customer hesitations, according to the President of the Manufacturers Association. The industry is also dealing with labor shortages, rising interest rates, and currency fluctuations that diminish export gains. These factors raise concerns about maintaining global competitiveness and could lead to companies relocating investments abroad.
The story in 5 lines · by baba
- Israeli companies face international customer hesitations, deal freezes, and new conditions, impacting exports.
- Factories are experiencing severe labor shortages and logistical issues, compounded by currency strength.
- The strong shekel reduces the value of export revenues when converted to local currency.
- Concerns are rising about maintaining Israel's industrial competitiveness in global markets.
- The Manufacturers Association proposes a national industrial policy to boost the economy.
Israeli companies are experiencing a slowdown in international business, with customers and distributors abroad delaying purchases, freezing deals, or imposing new contractual conditions, according to Nofogrotski, President of the Manufacturers Association. He stated in a November 8 interview that this situation has moved beyond an undeclared boycott to include public actions and informal restrictions, warning that damage to Israel's image is impacting various industrial and commercial sectors.
Beyond export challenges, Israeli factories have been grappling with a severe labor shortage for about 18 months, coupled with rising interest rates and a strong shekel against the dollar. While industrial goods exports increased by approximately 17% in dollar value, the shekel's strength significantly reduced these gains when converting revenue to local currency. This means factories may sell more but earn less in shekels. Supply chains were also disrupted during periods of airspace closures amid confrontations with Iran, adding logistical difficulties.
Nofogrotski cautioned that these conditions could prompt companies to move investments, production lines, and jobs out of Israel, rather than merely reducing activity or closing factories. He noted an increase in investment in industrial equipment and machinery from 12.5 billion shekels in 2024 to 13.8 billion shekels in 2025, but suggested much of this investment relies on confidence in the industry and the state, not necessarily a clear competitive advantage.
The Manufacturers Association is advocating for a long-term industrial policy, proposing a national plan costing around 2.2 billion shekels annually. The association estimates this plan could yield a net economic benefit of 9.7 billion shekels over five years. These figures are part of the association president's proposals amidst growing concerns about the Israeli industry's ability to maintain its competitiveness in global markets.
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