Textiles, diamonds and comestibles constituted Israel’s industrial base during the 1950s. In the following decades, the chemicals, metallurgical and electronics industries developed, causing a six-fold increase in industrial production. Exports in particular have increased: they account for more than half of Israel’s industrial output. Industry continues to grow in Israel at a faster rate than any other sector (Figures 18 and 19).

In its early stages, Israeli industry was concentrated near the major urban centers of Tel Aviv and Haifa. When development towns were built to accommodate the waves of immigrants that arrived in the 1950s and 60s, industry became an integral part of this demographic phenomenon. For example, mineral mining and processing in the south especially in the Dead Sea area were developed around the burgeoning pool of immigrant employees. Later, as agriculture became more heavily mechanized and agricultural workers became available for industrial employment, some industries moved into rural areas. Whereas almost all kibbutzim (collective settlements) were originally agricultural, today 23.5% of kibbutz members work in industry (26.7% remain tied to agricultural jobs). Nevertheless, Israeli industry remains heavily concentrated in metropolitan areas along the coastal plain. The difficulty of attracting industry to peripheral areas is the major factor in preventing the success of Israel’s population distribution schemes. Israel will feel this failure more acutely as new Eastern European immigrants crowd into the metropolitan centers on the coast.


Industry in Israel is expected to grow more than any other sector in the coming decades. Some forecasts predict that growth in industrial output could grow by a factor of seven by the year 2025, including a jump from 15.6% (in 1985) to 30.6% for chemicals, rubber and fuel, and an increase from 35.7% to 49.4% in metals and electronics output shares. Although growth in the phosphate industry is also expected, enriched raw material will account for a smaller proportion of output, and may actually decrease. Potash and bromine production are expected to increase as well, and growth is anticipated in raw materials output for construction and road building.

The expected growth in Israeli industry presents an increased challenge to the environment. But the past fifteen years demonstrate a promising trend toward greater environmental awareness in the industrial sector: environmental considerations are integrated into plans for industrial projects, and environmental standards are enforced with increasing regularity.