Should Israelis Worry? Kibbutz Industry Boasts Record $2.23 Billion in Production Outside Israel

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Kibbutz industrial enterprises expect to register a record amount of manufacturing overseas in 2014, reaching 8.9 billion, according to figures tabulated by the economic department of the Kibbutz Industries Association.

This represents an increase of 5.5% over the previous year and the continuation of a consistent trend of expanding production outside Israel’s borders. In 2000, by comparison, overseas production amounted to less than $250 million, putting the increase at 900% over 14 years.

Kibbutz industry sales in the domestic market rose by 3% and is expected to total $3.21 billion, while direct exports by kibbutz enterprises are expected to reach $3.31 billion compared with $3.26 billion in the previous year.

Kibbutz Industries Association CEO Udi Orenstein said 2014 heralds a slight recovery of the kibbutz industry after several years of stagnation and even decline in sales as a result of sluggish exports.

This trend has been received with obvious anxiety by some Israeli economists, fearing the local job market will have to bear the burden of the kibbutz movement’s success story with employees in foreign lands.

Orenstein addressed these concerns, saying, “The increase in production abroad is welcome, but it would better if it were accompanied by growth of the magnitude in exports from plants inside the country, which are the basis for employment and livelihood of kibbutz members and workers in neighboring communities.”

Orenstein added: “The rise in the exchange rate of the dollar increases the attractiveness of domestic production, and hopefully will increase exports.”

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