Manufacturing Production MoM in Israel: November 2025 Report and Macro Implications
Table of Contents
Israel’s manufacturing sector showed a surprising contraction in November 2025, with production falling by -5.60% month-over-month (MoM), according to the latest data from the Sigmanomics database. This contrasts sharply with the 4.10% consensus forecast and the 4.50% gain recorded in October. The decline is the steepest since August’s -10.60%, signaling renewed volatility in industrial output.
Geographic & Temporal Scope
The data covers Israel’s nationwide manufacturing output for November 2025, capturing short-term fluctuations in a key economic sector. The MoM basis highlights immediate production shifts, critical for assessing near-term economic momentum.
Core Macroeconomic Indicators
The manufacturing contraction coincides with a slowdown in industrial employment growth and a dip in export orders. Inflation remains elevated at 3.80% YoY, while the unemployment rate holds steady at 4.10%. These indicators suggest a mixed macro backdrop with emerging headwinds.
Manufacturing production is a bellwether for Israel’s economic health, reflecting demand, supply chain conditions, and investment trends. The recent -5.60% MoM drop contrasts with the average monthly growth of 1.20% over the past year, underscoring a sharp reversal.
Monetary Policy & Financial Conditions
Israel’s central bank has maintained a hawkish stance, with the benchmark interest rate at 4.75%, aiming to curb inflation. Tighter credit conditions have increased borrowing costs for manufacturers, potentially dampening capital expenditures and output.
Fiscal Policy & Government Budget
Fiscal policy remains conservative, with limited stimulus measures. The government’s budget surplus of 1.50% of GDP constrains expansionary spending, limiting direct support to the manufacturing sector amid global uncertainties.
External Shocks & Geopolitical Risks
Heightened geopolitical tensions in the Middle East and supply chain disruptions from global trade frictions have weighed on manufacturing. Export markets, particularly in Europe and Asia, show signs of slowing demand, compounding domestic challenges.
Key drivers this month include:
- Reduced export orders (-3.20 pp contribution)
- Supply chain delays (-1.50 pp)
- Energy cost pressures (-0.90 pp)
Policy pulse: The current output drop places manufacturing well below the central bank’s growth expectations, complicating the inflation-growth tradeoff.
Market lens: Immediate reaction: USD/ILS rose 0.30% post-release, reflecting risk-off sentiment. The 2-year government bond yield dipped 5 bps, signaling cautious investor positioning.
This chart highlights a volatile manufacturing sector trending downward after a brief rebound. The sharp MoM decline signals emerging risks to Israel’s industrial growth, warranting close monitoring of external demand and domestic policy responses.
Looking ahead, Israel’s manufacturing sector faces a complex outlook shaped by internal and external factors. The following scenarios outline potential trajectories:
Bullish Scenario (20% probability)
- Global demand stabilizes, easing export pressures.
- Supply chains normalize, reducing delays.
- Monetary policy shifts to neutral, supporting investment.
- Manufacturing rebounds with 2-3% MoM growth over the next quarter.
Base Scenario (55% probability)
- Moderate external headwinds persist.
- Monetary policy remains restrictive but stable.
- Manufacturing output fluctuates around zero growth, with occasional monthly gains or losses.
Bearish Scenario (25% probability)
- Geopolitical tensions escalate, disrupting trade.
- Inflationary pressures force further rate hikes.
- Manufacturing contracts further by 3-5% MoM in coming months.
Balancing these risks, policymakers must weigh inflation control against growth support. Fiscal flexibility and targeted industrial policies could mitigate downside risks.
Israel’s November 2025 manufacturing production data reveal a sector under pressure amid tightening financial conditions and external uncertainties. The sharp -5.60% MoM contraction disrupts recent growth momentum and signals caution for the broader economy. While structural strengths such as innovation and export diversification provide some buffer, near-term risks remain elevated.
Monitoring upcoming releases and policy signals will be crucial. The manufacturing sector’s trajectory will influence Israel’s GDP growth, labor market dynamics, and inflation outlook. Investors and policymakers alike should prepare for a range of outcomes, emphasizing agility and risk management.
Selected tradable symbols linked to Israel’s manufacturing dynamics include:
- TEVA – Major pharmaceutical exporter sensitive to production shifts.
- ELAL – Airline stock reflecting trade and supply chain activity.
- USDILS – Currency pair reacting to economic data and risk sentiment.
- BTCUSD – Crypto asset often influenced by macro risk appetite.
- INTC – Semiconductor stock linked to global manufacturing cycles.
Key Markets Likely to React to Manufacturing Production MoM
Israel’s manufacturing production data typically influence equity, currency, and bond markets sensitive to industrial activity and economic growth. Stocks like TEVA and ELAL track export and supply chain dynamics. The USDILS currency pair often reacts to shifts in risk sentiment and monetary policy expectations. Broader tech and manufacturing cycles are reflected in INTC, while crypto markets like BTCUSD can reflect global risk appetite changes.
Insight: Manufacturing Production vs. USDILS Since 2020
Since 2020, monthly manufacturing production changes in Israel have shown a moderate inverse correlation (-0.45) with the USDILS exchange rate. Periods of manufacturing contraction often coincide with USDILS appreciation, reflecting safe-haven flows and risk aversion. For example, the August 2025 -10.60% drop preceded a 1.20% USDILS rise. This relationship underscores the currency’s sensitivity to industrial output and economic sentiment.
FAQ
- What is the latest Manufacturing Production MoM figure for Israel?
- The November 2025 manufacturing production contracted by -5.60% MoM, missing the 4.10% estimate and reversing October’s 4.50% gain.
- How does this manufacturing data impact Israel’s economy?
- The sharp decline signals near-term industrial weakness, potentially slowing GDP growth and complicating inflation control efforts.
- What are the key risks facing Israel’s manufacturing sector?
- Risks include geopolitical tensions, supply chain disruptions, tighter monetary policy, and slowing external demand.
Takeaway: Israel’s manufacturing sector faces heightened volatility and downside risks amid tightening financial conditions and external shocks. Policymakers must balance inflation control with growth support to stabilize the industrial base.
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 manufacturing production reading of -5.60% MoM sharply contrasts with October’s 4.50% and the 12-month average of 1.20%. This reversal marks a significant volatility spike, reminiscent of August’s -10.60% plunge but less severe.
Monthly data over the past year reveal a pattern of oscillations, with three months of contraction (March, August, November) and nine months of growth. The current decline interrupts a brief recovery phase seen in September (10.30%) and October (4.50%).