Short answer: Yes, at least in the short and medium term: defense exports reached a record 19.2 billion dollars in 2025, up about 30% from 2024, even as Europe's share fell from 54% to 36%. The growth comes from Asia-Pacific and the Abraham Accords countries, and the order backlog of the three largest companies stands at about 90 billion dollars. The open question is not demand but customer concentration.
The longer view
The European restrictions are not uniform. Spain enshrined in Royal Decree-Law 10/2025, ratified by its parliament on 8 Oct 2025, a two-way embargo on defense and dual-use equipment, including transit through its territory, and canceled contracts (Silam launchers, Spike missiles). Slovenia declared a full trade ban. Italy, Belgium and the Netherlands restricted exports to Israel only. Germany froze in August 2025 exports to Israel of equipment that could be used in Gaza, resumed them on 24 Nov 2025 and remains a major customer (Arrow 3). Meanwhile, 32% of 2025 deals were in Asia-Pacific, 15% in Abraham Accords countries, and about 10 billion dollars went through the government-to-government channel.
In The Blue Pumpkin's seven-layer reading, this is a friction between the geopolitical layer (fast: political decisions in Europe) and the economy layer (medium: rising defense budgets). For a manager at a defense company or a subcontractor, the risk is not losing a market but concentration: dependence on a few government customers, a strong shekel that erodes up to 20% of profitability, and the state's debts to the industry. SIBAT itself warns that the "battle-proven" label is no longer exclusive to Israel: Ukraine now markets it too.
This is a reading through the seven layers of The Blue Pumpkin, the method of Dr. Bella Barda-Bareket.
What to do tomorrow morning
Map the order backlog by country and by channel (direct, government-to-government, subcontracting) and flag every contract that depends on approval by a single European government. For each such contract, define an alternative customer in Asia or the Gulf.
Sources: Globes, 2 Jun 2026 · Calcalist, 2 Jun 2026 · Euronews, 2 Oct 2025 · Clyde & Co, 13 Nov 2025