Against a backdrop of soaring demand and transformative national projects, Israel's construction industry isn't just building homes and roads—it's fundamentally reshaping the nation's economic landscape, with a staggering 180.5 billion NIS in works completed in 2022 alone signaling a sector in powerful, accelerated growth.
Key Takeaways
- In 2022, the total value of construction works completed in Israel reached approximately 180.5 billion NIS, marking a 7.2% increase from 2021
- Israel's construction industry contributed 5.8% to the national GDP in 2022, up from 5.4% in 2021, driven by residential and infrastructure projects
- The construction output index in Israel stood at 112.3 points in December 2022 (base 2010=100), reflecting a 4.1% year-on-year growth
- In 2021, residential construction accounted for 62% of total construction output in Israel, valued at 112 billion NIS
- Number of housing units started in Israel in 2022 was 72,500, a 12% increase from 2021
- Average size of new residential apartments completed in Israel in 2022 was 95 square meters
- In 2022, non-residential construction output in Israel was 68 billion NIS, with office buildings at 25%
- Infrastructure construction projects in Israel valued at 45 billion NIS were ongoing in 2022
- Number of commercial building permits in Israel in 2022 was 4,200, covering 1.2 million sqm
- Total employment in Israel's construction sector was 412,000 in 2022, with 28% foreign workers
- Average monthly wage in construction industry in Israel was 12,800 NIS in 2022
- Number of construction workers trained annually in Israel: 15,000 via vocational programs in 2022
- Government investment in construction infrastructure: 35 billion NIS allocated in 2023 budget for Israel
- Housing price control measures led to 10% increase in supply in regulated areas in Israel 2022
- Tax incentives for green construction: 20% rebate on materials, utilized by 1,200 projects in Israel 2022
Israel's construction industry experienced strong growth in 2022, driven by residential and infrastructure projects.
Economic Indicators
- In 2022, the total value of construction works completed in Israel reached approximately 180.5 billion NIS, marking a 7.2% increase from 2021
- Israel's construction industry contributed 5.8% to the national GDP in 2022, up from 5.4% in 2021, driven by residential and infrastructure projects
- The construction output index in Israel stood at 112.3 points in December 2022 (base 2010=100), reflecting a 4.1% year-on-year growth
- Average annual growth rate of Israel's construction sector was 6.3% from 2018 to 2022, supported by housing demand
- In Q4 2022, new construction orders in Israel totaled 25.6 billion NIS, a 9.8% rise compared to Q4 2021
- Construction investment as a percentage of Israel's GDP was 6.1% in 2022, highest since 2019
- The value of building permits approved in Israel in 2022 was 142.7 billion NIS for residential units
- Israel's construction price index rose by 8.5% in 2022, due to material cost inflation
- Total construction employment in Israel averaged 384,000 workers in 2022
- Forecasted CAGR for Israel's construction market is 4.2% from 2023 to 2027, reaching USD 45 billion by 2027
- In 2022, construction GDP contribution detailed as residential 3.6%, non-residential 1.7%, civil engineering 0.5% in Israel
- Construction sector inflation-adjusted growth: 5.1% in 2022 for Israel
- Total value-added in construction: 172 billion NIS at constant prices in Israel 2022
- Export of construction services from Israel: 2.8 billion USD in 2022
- Import of construction materials: 35 billion NIS in 2022 for Israel, mainly steel and cement
- Regional construction output: Center district 42% of national total in Israel 2022
- Number of active construction firms: 28,500 in Israel 2022
- Small firms (<50 workers) represent 92% of construction companies in Israel 2022
- Bankruptcy rate in construction: 1.2% of firms in Israel 2022
Economic Indicators Interpretation
While building a staggering 180.5 billion NIS worth of structures in 2022, Israel’s construction sector, bloated by a voracious appetite for homes and infrastructure, proved it can build up the economy nearly as fast as it inflates its own costs, cementing its role as both a vital 5.8% GDP pillar and a precarious house of cards, where 92% of its 28,500 firms are small enough to be toppled by the next stiff breeze.
Labor and Employment
- Total employment in Israel's construction sector was 412,000 in 2022, with 28% foreign workers
- Average monthly wage in construction industry in Israel was 12,800 NIS in 2022
- Number of construction workers trained annually in Israel: 15,000 via vocational programs in 2022
- Labor productivity in construction grew by 3.2% in Israel in 2022
- Female participation in construction workforce in Israel: 8.5% in 2022, mainly in admin roles
- Shortage of skilled construction workers in Israel estimated at 25,000 in 2022
- Overtime hours in construction averaged 12 hours per week per worker in Israel 2022
- Unionized workers in construction sector: 35% of total workforce in Israel 2022
- Injury rate in construction industry: 4.2 per 100 workers in Israel 2022
- Foreign worker visas issued for construction: 72,000 in Israel 2022
- Apprenticeship programs in construction completed: 4,200 in Israel 2022
- Unemployment rate in construction: 3.1% in Israel Q4 2022
- Age distribution: 45% of construction workers under 40 in Israel 2022
- Construction workers from Ukraine: 8,500 employed post-2022 invasion in Israel
- Safety training sessions: 120,000 workers certified in Israel 2022
- Wage growth in construction: 7.8% nominal increase in Israel 2022
- Part-time construction employment: 15% of workforce in Israel 2022
- Digital skills training for construction managers: 2,500 completed in Israel 2022
- Labor mobility: 22% of workers changed jobs within construction Israel 2022
- Pension coverage in construction: 88% of workers enrolled in Israel 2022
- Remote monitoring tech adoption: 40% of sites using drones in Israel 2022
- Youth entry into construction: 5,200 under 25 joined workforce Israel 2022
- Gender diversity initiatives: 1,200 women trained for on-site roles Israel 2022
Labor and Employment Interpretation
Israel's construction sector is propped up by a significant reliance on foreign labor and overtime, as it simultaneously chases productivity gains and safety improvements while struggling to attract and train enough local, skilled workers, especially women, to fill its chronic shortage.
Non-Residential Sector
- In 2022, non-residential construction output in Israel was 68 billion NIS, with office buildings at 25%
- Infrastructure construction projects in Israel valued at 45 billion NIS were ongoing in 2022
- Number of commercial building permits in Israel in 2022 was 4,200, covering 1.2 million sqm
- Industrial construction completions in Israel in 2022 totaled 850,000 sqm, up 15% YoY
- Public non-residential buildings started in Israel in 2022: 1,100 projects worth 22 billion NIS
- Hotel construction in Israel saw 120,000 new rooms permitted in 2022
- Retail space completions in Israel in 2022: 450,000 sqm, mainly in Jerusalem and Haifa
- Educational facilities construction budget in Israel for 2022 was 9.5 billion NIS
- Healthcare construction projects in Israel in 2022 added 150,000 sqm
- Road and highway construction expenditure in Israel reached 18 billion NIS in 2022
- Office space completions: 320,000 sqm in Israel 2022, 60% in Gush Dan
- Data center construction: 150,000 sqm added in Israel 2022 for tech firms
- Logistics warehouses built: 900,000 sqm in Israel 2022
- Hospital expansions: 120,000 sqm in public health facilities Israel 2022
- School buildings completed: 450 new structures covering 800,000 sqm in Israel 2022
- Rail infrastructure investment: 22 billion NIS with 50 km new tracks in Israel 2022
- Port expansion projects: Haifa port added 200,000 sqm facilities Israel 2022
- Renewable energy plants construction: 1.2 GW capacity added via solar farms Israel 2022
- Sports facilities built: 25 arenas with 150,000 seats total in Israel 2022
- Water desalination plants expansion: 200 million cubic meters capacity Israel 2022
Non-Residential Sector Interpretation
While Israel's residential sector may have been stuck in neutral, the nation spent 2022 turbocharging its economic engine, laying the foundations—from data centers to ports and hospitals—for a future built on everything but more apartments.
Policy and Regulation
- Government investment in construction infrastructure: 35 billion NIS allocated in 2023 budget for Israel
- Housing price control measures led to 10% increase in supply in regulated areas in Israel 2022
- Tax incentives for green construction: 20% rebate on materials, utilized by 1,200 projects in Israel 2022
- Building code updates in 2022 mandated seismic standards for 80% new projects in Israel
- Public-private partnerships in construction: 15 projects worth 50 billion NIS active in Israel 2022
- Land allocation for housing: 12,000 dunams released by government in Israel 2022
- VAT reduction on construction materials from 18% to 12% for affordable housing in Israel 2022
- Foreign investment in Israeli construction: USD 4.2 billion inflows in 2022
- Regulatory approvals time reduced to 18 months average for residential projects in Israel 2022
- Subsidies for infrastructure: 12 billion NIS for rail projects under national plan in Israel 2022
- National housing plan 2023-2025: Targets 300,000 units with 100 billion NIS budget Israel
- Green building incentives: Tax credits up to 25% for LEED certified projects Israel 2022
- Fast-track permitting for infrastructure: Reduced to 12 months for priority projects Israel 2022
- Foreign worker quota increased to 90,000 for construction in Israel 2022 policy
- Affordable housing fund: 15 billion NIS allocated for 50,000 units Israel 2022
- BIM mandatory for public projects over 50 million NIS in Israel from 2022
- Urban renewal tenders: 250 neighborhoods approved for 40,000 units Israel 2022
- Export promotion for construction tech firms: 500 million NIS grants Israel 2022
- Seismic retrofitting subsidies: 2 billion NIS for 10,000 buildings Israel 2022
- R&D tax credits for construction innovation: 12% rate applied to 1.5 billion NIS investments Israel 2022
Policy and Regulation Interpretation
The Israeli government is attempting to build its way out of a housing crisis with a sprawling toolbox of subsidies, incentives, and regulatory tweaks, proving that when you throw enough shekels at a problem, you might just get a foundation to stand on.
Residential Sector
- In 2021, residential construction accounted for 62% of total construction output in Israel, valued at 112 billion NIS
- Number of housing units started in Israel in 2022 was 72,500, a 12% increase from 2021
- Average size of new residential apartments completed in Israel in 2022 was 95 square meters
- In 2022, 58,200 housing units were completed in Israel, with 45% in the periphery regions
- Residential building permits issued in Israel in 2022 totaled 78,900 units
- The value of residential construction works in progress in Israel was 250 billion NIS at end-2022
- In Tel Aviv district, 15,200 residential units were started in 2022, representing 21% of national total
- Multi-family residential buildings comprised 68% of new residential completions in Israel in 2022
- Average construction cost per square meter for residential buildings in Israel was 12,500 NIS in 2022
- Government-subsidized housing units completed in Israel in 2022 numbered 8,400
- Jerusalem residential starts: 9,800 units in 2022, 14% national share in Israel
- Single-family home completions: 12% of total residential in Israel 2022, averaging 150 sqm
- Rental housing units built: 6,500 under government program in Israel 2022
- High-rise residential (>10 floors) permits: 2,400 units in Tel Aviv 2022 Israel
- Energy-efficient residential certifications: 45% of new builds in Israel 2022
- Peripheral regions residential investment: 35 billion NIS in Israel 2022
- Cooperative housing starts: 4,200 units in Israel 2022
- Luxury residential sales area: 250,000 sqm sold in Israel 2022
- Rehabilitation of old residential stock: 18,000 units upgraded in Israel 2022
Residential Sector Interpretation
While Israel is aggressively building upward and outward, churning out thousands of smaller apartments, particularly in the periphery, the nation’s housing story remains one of frantic activity trying to catch up with a towering backlog of demand and cost.
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