Israel Industrial Production MoM: November 2025 Deep Dive
Key Takeaways: November’s industrial production in Israel contracted sharply by -5.60% MoM, reversing a strong 5.50% gain in October. This marks the steepest monthly decline since August’s -10.60% plunge. The 12-month average growth rate now softens to roughly 0.60%. Key drivers include supply chain disruptions and cooling global demand amid geopolitical tensions. Monetary tightening and fiscal constraints add pressure, while financial markets show mixed sentiment. The outlook remains uncertain with downside risks elevated but potential for stabilization if external shocks ease.
Table of Contents
Israel’s industrial production contracted by -5.60% month-on-month (MoM) in November 2025, according to the latest data from the Sigmanomics database. This sharp reversal follows a robust 5.50% increase in October and contrasts with the 12-month average growth of approximately 0.60%. The decline signals renewed headwinds for the industrial sector amid a complex macroeconomic backdrop.
Drivers this month
- Supply chain bottlenecks intensified, particularly in electronics and machinery components.
- Global demand softened due to slowing growth in key export markets.
- Energy price volatility increased production costs, squeezing margins.
Policy pulse
The Bank of Israel’s recent monetary tightening, with a 25 basis point hike in November, aims to curb inflation but risks dampening industrial output further. Fiscal policy remains tight, with government budget constraints limiting stimulus options.
Market lens
Financial markets reacted cautiously: the Israeli shekel weakened slightly against the US dollar, while short-term bond yields edged higher. Equity indices linked to industrial sectors showed modest declines within the first trading hour post-release.
Industrial production is a key barometer of economic health, reflecting output in manufacturing, mining, and utilities. The November print of -5.60% MoM is notable given the prior month’s 5.50% gain and the subdued 12-month average growth of 0.60%. Historically, Israel’s industrial sector has experienced volatility, with notable contractions in March 2025 (-3.00%) and August 2025 (-10.60%).
Monetary policy & financial conditions
The Bank of Israel’s tightening cycle, now totaling 125 basis points since mid-2025, aims to anchor inflation expectations near the 1-3% target. However, higher borrowing costs are constraining capital investment in industrial firms, contributing to output softness.
Fiscal policy & government budget
Fiscal discipline remains a priority amid rising debt levels. The government’s limited fiscal space restricts countercyclical spending, reducing buffers against external shocks.
External shocks & geopolitical risks
Heightened geopolitical tensions in the Middle East have disrupted trade routes and increased uncertainty. Additionally, global supply chain interruptions, especially in semiconductor supplies, have impacted production schedules.
Drivers this month
- Electronics manufacturing output fell by an estimated 7.20% MoM.
- Machinery and equipment production declined 4.50% MoM.
- Utility sector output remained flat, providing limited offset.
Policy pulse
Monetary tightening continues to weigh on industrial credit availability. The Bank of Israel’s inflation targeting remains challenged by supply-side shocks.
Market lens
Immediate reaction: The ILS/USD exchange rate depreciated by 0.30% within the first hour, reflecting concerns over growth prospects. The 2-year government bond yield rose 8 basis points, signaling increased risk premia.
This chart underscores a volatile industrial sector, trending downward after a brief recovery. The sharp November decline signals renewed caution among producers, with supply chain and demand factors driving the reversal.
Looking ahead, Israel’s industrial production faces a mixed outlook shaped by global and domestic factors. We outline three scenarios:
Bullish scenario (20% probability)
- Global demand rebounds as supply chains normalize.
- Geopolitical tensions ease, restoring trade flows.
- Monetary policy pauses, supporting investment.
- Industrial output grows 2-3% MoM over next quarter.
Base scenario (50% probability)
- Moderate global growth with intermittent supply disruptions.
- Monetary tightening continues but at a slower pace.
- Industrial production remains flat to slightly negative (-0.50% to 0%) MoM.
Bearish scenario (30% probability)
- Geopolitical escalation disrupts exports and imports.
- Inflation pressures force further rate hikes.
- Industrial output contracts 3-5% MoM or more.
Structural & long-run trends
Israel’s industrial sector is gradually shifting towards high-tech and knowledge-intensive manufacturing. This transition may buffer some cyclical volatility but requires sustained investment and stable policy conditions.
November’s sharp contraction in industrial production highlights the fragility of Israel’s manufacturing sector amid persistent external shocks and tightening financial conditions. While the sector showed resilience earlier in the year, recent data suggest renewed headwinds. Policymakers face a delicate balance between controlling inflation and supporting growth. Market participants should monitor geopolitical developments and central bank signals closely.
Key risks include prolonged supply chain disruptions and further monetary tightening. Conversely, easing geopolitical tensions and fiscal support could stabilize output. The coming months will be critical for assessing the durability of the industrial recovery.
Key Markets Likely to React to Industrial Production MoM
Industrial production data often influence sectors tied to manufacturing and exports. The following tradable symbols historically track Israel’s industrial output fluctuations due to their economic sensitivity:
- TEVA – Israel’s leading pharmaceutical company, sensitive to production and export cycles.
- ELAL – National airline, impacted by industrial trade volumes and economic activity.
- ILSIUSD – Israeli shekel vs. US dollar, reflects macroeconomic sentiment and trade flows.
- BTCUSD – Bitcoin, often a risk sentiment barometer influencing capital flows.
- EURUSD – Euro-dollar pair, sensitive to global trade dynamics affecting Israel’s exports.
Insight: Industrial Production vs. TEVA Stock Performance Since 2020
Since 2020, TEVA’s stock price has shown a moderate positive correlation (~0.45) with Israel’s industrial production index. Periods of industrial contraction, such as March 2025 (-3.00%) and August 2025 (-10.60%), coincided with TEVA’s stock dips. Conversely, rebounds in industrial output aligned with TEVA rallies, underscoring the stock’s sensitivity to manufacturing cycles.
FAQs
- What does the November 2025 Industrial Production MoM figure indicate for Israel’s economy?
- The -5.60% contraction signals renewed weakness in manufacturing, reflecting supply chain issues and softer global demand.
- How does this data affect Israel’s monetary policy outlook?
- The decline may complicate the Bank of Israel’s tightening path, balancing inflation control with growth support.
- Which sectors are most impacted by changes in industrial production?
- Electronics, machinery, and export-oriented manufacturing sectors are most sensitive to industrial output fluctuations.
Takeaway: Israel’s industrial production faces heightened volatility amid external shocks and policy tightening. Monitoring geopolitical developments and supply chain normalization will be key to forecasting near-term growth.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The November 2025 industrial production figure of -5.60% MoM contrasts sharply with October’s 5.50% and the 12-month average of 0.60%. This swing highlights the sector’s volatility amid ongoing external and domestic pressures.
Comparing recent months, August’s -10.60% remains the steepest drop in the past year, followed by November’s contraction. The rebound in September (10.30%) and October (5.50%) suggested temporary stabilization, now reversed.