A depleted workforce. Constant rocket sirens. The lingering shock of an unexpected attack. The cost to Israel’s economy of its war with Hamas militants will be unlike anything it has experienced in decades, Reuters reports.

The cranes that dot Tel Aviv’s ever-growing skyline stood still for days after the city closed construction sites. They reopened this week under stricter safety guidelines but inactivity in this sector alone costs the economy an estimated 150 million shekels ($37 million) a day, an industry report said.

“This is not a hit for contractors or industrialists alone,” said Raul Sarugo, president of the Israel Builders’ Association. “This is a hit for every household in Israel.”

Israel’s almost $500 billion economy, the most developed in the Middle East with strengths in technology and tourism, was healthy for most of 2023. Growth was on track to reach 3pc this year with low unemployment.

But with a ground invasion of Gaza likely imminent and the war threatening to spiral into a regional conflict, Israelis are hunkering down and spending much less on everything except food. Rating agencies have already warned they could downgrade their assessment of the country’s creditworthiness.

Hundreds of thousands of army reservists have been called up, leaving a gaping hole in manpower and disrupting supply chains from seaports to supermarkets, while retailers are furloughing employees. The shekel has slumped.

The conflict has also halted the movement of thousands of Palestinian labourers from Gaza to Israel and curtailed the flow from the occupied West Bank.