Israeli Exporters Face Quiet Boycotts and Severe Economic Pressures
Israeli industry faces severe challenges from labor shortages, a strong shekel, and quiet international boycotts. Incoming Manufacturers Association president Avraham Novogrodsky calls for a national economic strategy.
Israeli industry is facing one of the most complex periods in its history. Amid the shadows of war, severe labor shortages, and a stronger shekel against the dollar, exporters are grappling with a much more dangerous challenge: the expansion of a quiet boycott in international markets that threatens to treat Israeli products as pariahs. Avraham (Novo) Novogrodsky, the incoming president of the Manufacturers Association of Israel, paints a concerning picture, warning that without immediate government policy changes, the economy risks losing industrial know-how, quality jobs, and production capabilities.
The Rise of the Quiet Boycott
Exporters report that they are increasingly forced to remove "Made in Israel" labels from their products to secure sales. When asked if Israel is already facing a covert boycott and whether the government understands the depth of the crisis, Novogrodsky stated that these actions are no longer entirely covert. "We are seeing open steps alongside countless informal barriers that make it difficult for Israeli companies to operate internationally," he explained. Beyond legislation and political statements, a broader phenomenon of a quiet boycott is emerging, where clients and distributors delay decisions or freeze deals.
Despite these mounting pressures, Israeli industry continues to demonstrate remarkable resilience. Industrial commodity exports grew by approximately 17 percent in dollar terms, though much of this growth was eroded by the appreciation of the shekel. Factories are managing to sell more globally, yet they see significantly lower returns on their bottom line. Furthermore, disruptions in supply chains and export routes during regional escalations have heavily impacted operations, with 83 percent of industrialists reporting anticipated export damage during recent military operations.
Investments and National Strategy
Even as the country navigates credit rating downgrades, high interest rates, and political uncertainty, industrial investments in machinery and equipment actually rose from 12.5 billion shekels in 2024 to 13.8 billion shekels in 2025. This indicates that factories continue to invest in technology and productivity out of deep-seated belief in the country, rather than clear economic advantages. However, international companies are finding it increasingly difficult to approve expansion projects within Israel.
To counter these systemic challenges, the Manufacturers Association has proposed a comprehensive national plan costing roughly 2.2 billion shekels annually. Novogrodsky stresses that industry must be viewed as a growth engine rather than a budgetary expense. The sector contributed around 240 billion shekels to the business GDP in 2025, employing close to 400,000 workers. The primary demand from the incoming government is the adoption of a long-term national industrial strategy to ensure future economic stability.
