Business-sector survey signals acceleration in activity toward year-end

ISRAEL - In Brief 07 Jan 2026 by Sani Ziv

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The latest Business Survey for December 2025, which provides the closest local proxy to a PMI and covers both the industrial and services sectors, points to a further acceleration in activity toward year-end. The net balance for current activity rose to 20.88 points from 19.68 in November, although it remains below pre-war levels (around 23–24 points), mainly due to continued weakness in the hospitality sector. Firms expect activity to continue expanding and employment to increase again next month. The high-tech services sector (information and communication) stands out, reporting expectations of a sharp increase in exports in the coming month, alongside further employment growth. In industry, the net balance stood at 31.5%, unchanged from November. Production and sales balances were sharply positive (10.1% and 11.4%, respectively) with anticipation pointing to continued growth in January, particularly in production and export orders. In services, business conditions improved further to 21.2%, up from 18.8% in November. Both domestic and export sales balances turned positive, and expectations for January strengthened, especially for employment and sales. By contrast, construction continues to lag. The overall business balance remains positive (11.4%), but current activity and new orders weakened again in December and expectations for January point to only modest improvement. Retail trade shows mixed signals: The current business balance eased to 14.9%, but expectations for January sales and supplier orders strengthened, suggesting a possible near-term increase after a softer December. Hospitality remains the weakest sector, with business conditions still negative (-5.8...