In 2017, FDI into Israel reached its highest level since greenfield investment monitor fDi Markets began recording data in 2003. Inflow has been steadily increasing since 2015, with a 6.66% increase in project numbers between January 2015 and December 2016. Capital expenditure and job creation also increased during this period, by $1074.1m and $1482m respectively.
Data for 2017 is only available for the first three quarters, but project numbers have already surpassed 2016 full-year results, recording an additional six investments thus far.
Compared on a quarterly basis with the same time period in the previous year, the first quarter of 2017 recorded a slight increase of an additional two investments. During the second quarter, project numbers increased from 11 to 16 and in the third quarter, project numbers doubled from eight to 16.
Tech and software lead
The key source countries for investments between January 2015 and December 2016 were the US, which accounted for 51%, followed by China, Germany and the UK, which each represented 6%. The leading industry sectors for investment were software and IT services, financial services and business services, with more than 40% of projects focusing on research, development and testing operations. Of the projects where investment motives were cited, technology and innovation ranked first with 48%, followed by skilled workforce availability with 36%, and regulations or business climate with 24%.
The rise in investment into Israel is clear when comparing its position against other countries in the region. Between 2003 and 2014, Israel ranked sixth for Middle Eastern investment, climbing to fourth place between 2014 and 2016; and so far in 2017 it is currently in second place behind the United Arab Emirates. Given that the first three quarters of 2017 have seen higher levels of investment than full years in the recent past have done, Israel is a destination to watch.