One in Five Israeli Businesses Hurt by Dollar Depreciation, Survey Finds
A recent survey conducted by the Israeli Central Bureau of Statistics (CBS) in cooperation with the Bank of Israel reveals that one in five businesses in Israel reported negative impacts from the depreciation of the US dollar over the past six months. These affected businesses employ about a quarter of the workforce. Only 3% of respondents noted positive effects, while the majority saw no significant impact. Over this period, the shekel strengthened against the dollar, with the exchange rate dropping from approximately 3.3 shekels per dollar at the end of 2025 to below 3 shekels in June 2026.
The survey targeted business managers with at least five employees, representing around 67,000 businesses, and achieved a 73% response rate. The sectors most affected by the dollar's decline were high-tech and finance, with 49% reporting harm, compared to just 9% in construction. Nearly half of those impacted cited foreign currency revenues as their main exposure to exchange rate fluctuations, while 22% pointed to contracts or prices linked to foreign currency in the local market.
In response to the depreciation, about 20% of businesses adjusted prices domestically or abroad, one-third absorbed the exchange rate loss in profit margins, and around 15% reduced investments or slowed hiring. Notably, only 7% engaged in financial hedging, mostly for periods exceeding six months. Surprisingly, about 30% of affected businesses are export-oriented with over half their revenue from abroad, but a third rely primarily on the domestic market with little or no export activity. The CBS explained that local businesses suffer due to various transmission channels, including pricing contracts tied to the dollar, tourism declines, and subcontracting relationships with export-heavy firms.
Regarding price adjustments, 23% of businesses reported changes within a month, and 22% within three months, while 18% saw no impact on their product prices. Most construction managers (56%) expect exchange rate changes to affect their sales prices within three months, alongside about half of managers in industry, high-tech, finance, services, hospitality, and 30% in commerce.
