Strong Shekel Takes Heavy Toll on Israeli Exports, Industry Warns of Layoffs and Factory Cuts
Israel’s exporters are feeling the impact of the weakening U.S. dollar, with new figures showing that despite growth in export sales measured in dollars, the sharp rise of the shekel has erased those gains and translated them into significant losses across major sectors of the economy.
An analysis by the Manufacturers Association of Israel, based on data from the Central Bureau of Statistics and reported by Channel 12 News, found that export growth recorded during the first four months of 2026 turned into a substantial decline when revenues were converted into shekels. Since the start of the year, the dollar has lost roughly 12% of its value against the shekel, and about 20% over the past year.
According to the report, industrial exports excluding diamonds increased by 5% in dollar terms between January and April, rising from $17.5 billion to $18.3 billion. However, when those earnings were calculated in shekels, export revenues fell sharply. Total exports dropped from NIS 63.4 billion during the same period last year to NIS 56.7 billion this year—a decline of approximately 10%.
The Manufacturers Association said the downturn was evident across much of the industrial sector. High-tech industries, which account for about 42% of Israel’s exports, posted a 4.6% increase in dollar-denominated sales. Yet after currency conversion, those gains became an 11% decline, representing an estimated loss of roughly NIS 3 billion.
Traditional manufacturing suffered even more severe damage. A 4.3% decline in exports measured in dollars translated into an 18.3% drop in shekel terms, amounting to losses of approximately NIS 904 million.
The data showed that 21 of Israel’s 27 industrial sectors experienced declines when export earnings were measured in local currency.
In the high-tech and electronics industries, a 5% increase in exports in dollar terms became an 11% decline after conversion to shekels, wiping out about NIS 2.4 billion in revenue. The chemicals sector saw a 2% rise in dollar-based exports turn into a 13% decline in shekel terms, resulting in losses estimated at NIS 1.7 billion.
The pharmaceutical industry was also hit hard. A 6% drop in exports measured in dollars deepened to nearly 20% when calculated in shekels, reducing revenues by roughly NIS 477 million. The rubber and plastics sector experienced a similar trend, with a 4% decline in dollar exports becoming an 18% decline in local currency, equal to losses of about NIS 490 million.
Netanel Hyman, head of the Economics Division at the Manufacturers Association, warned that the continued strengthening of the shekel is inflicting serious damage on key sectors of the Israeli economy. He said the erosion of Israeli competitiveness in global markets can no longer be ignored and cautioned that failure to address the issue could result in lost investment, factory closures, and job cuts.
Hyman called on the Bank of Israel, government officials, and regulators to take coordinated and immediate action to address the growing problem before the economic consequences become even more severe.
{Matzav.com}
