The construction industry in Israel is expected to decline by 1.5% in real terms in 2026, owing to rising unemployment and elevated construction costs, amid the ongoing multifront war in the country, coupled with a decrease in budgetary allocation for the infrastructure sector, to focus on the defence sector due to the ongoing war. Israel’s construction and infrastructure sectors are facing higher material prices, project delays, labor and financing constraints, and a shift in government spending toward defence, civil protection, and resilience infrastructure. According to the latest data issued by the Central Bureau of Statistics (CBS), the total area authorized for the construction of buildings fell by 13.9% year-on-year (YoY) in Q4 2025, preceded by YoY growth rate of 6.1% in Q3 and a decline of 3.4% in Q2 2025. According to the CBS, the total area authorized for the construction of buildings on which construction started fell marginally by 0.2% YoY in Q4 2025, preceded by YoY growth rates of 14.7% in Q3 and 50.3% in Q2 2025
The construction industry in Israel is expected to register an average annual growth of 4.7% from 2027 to 2030, driven by investments in transport infrastructure, energy, and housing projects. Among the recent developments, in May 2026, the government approved more than ILS1 billion ($270 million) to construct roads linking new settlements in the occupied territory. Furthermore, Israel’s national roads company, Netivei Israel, in January 2026, issued large-scale construction tenders worth ILS8 billion ($2.4 billion) for multiple road infrastructure projects, marking a significant expansion of highway and transport capacity. The programme includes upgrading and widening key intercity roads, constructing new interchanges, and improving junctions and traffic flows. Among the projects in the tenders are the improvement of the stretch of Road 44 between Beit Dagan and Nir Zvi and in the Beit Dagan Interchange area, with an investment of ILS2.4 billion ($710.8 million).
The construction industry in Israel is expected to register an average annual growth of 4.7% from 2027 to 2030, driven by investments in transport infrastructure, energy, and housing projects. Among the recent developments, in May 2026, the government approved more than ILS1 billion ($270 million) to construct roads linking new settlements in the occupied territory. Furthermore, Israel’s national roads company, Netivei Israel, in January 2026, issued large-scale construction tenders worth ILS8 billion ($2.4 billion) for multiple road infrastructure projects, marking a significant expansion of highway and transport capacity. The programme includes upgrading and widening key intercity roads, constructing new interchanges, and improving junctions and traffic flows. Among the projects in the tenders are the improvement of the stretch of Road 44 between Beit Dagan and Nir Zvi and in the Beit Dagan Interchange area, with an investment of ILS2.4 billion ($710.8 million).
The Construction in Israel - Key Trends and Opportunities to 2030 (H1 2026) report provides detailed market analysis, information, and insights into Israel's construction industry, including:
- Israel's construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Israel's construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
Scope
This report provides a comprehensive analysis of the construction industry in Israel. It provides:
- Historical (2021-2025) and forecast (2026-2030) valuations of the construction industry in Israel, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants
Reasons to Buy
- Identify and evaluate market opportunities using our standardized valuation and forecasting methodologies
- Assess market growth potential at a micro-level with over 600 time-series data forecasts
- Understand the latest industry and market trends
- Formulate and validate business strategies using the analyst's critical and actionable insight
- Assess business risks, including cost, regulatory and competitive pressures
- Evaluate competitive risk and success factors
