International poll: Israelis no longer worried about recession

Israeli consumers have regained the faith, in the economy that is. Their concerns regarding the recession have largely, if not completely, abated, relative to their peers around the world.

An international survey of consumers by the international research firm Nielsen finds the Israeli consumer feeling fine, relatively speaking: Only 5% of respondents said the economic situation is their main concern, compared with a global average of 18% (and compared with 23% in Israel about six months ago, when the global economic crisis was at its worst).

Nielsen conducted the survey in mid-October, canvassing more than 30,000 adults in 52 countries, including Israel. With the economic situation off their mind, what's worrying Israelis the most these days is health, the agency found. Eighteen percent of Israelis named health as their main concern. "Health" is a broad term in this context, covering not only fear of the flu but concerns about outlays for healthcare insurance, for instance. Six months ago, the category of health had ranked third on the list of concerns, ranking highest among 11% of Israeli respondents.

In the latest survey, following health we find job security, though there too the situation has improved. Six months ago the proportion of Israeli respondents ranking job security as their paramount concern was 18%; now the figure has fallen to 13%.

One matter where concerns stayed roughly steady was personal debt, a category that includes the humble bank overdraft. Ten percent of Israelis ranked their debt the most worrisome thing in their lives.

If one thing has changed in the last six months it's that Israelis seem to feel they have the luxury to fret over the way they distribute their time between work and family. While recession raged, people quaking in fear of being fired were grateful to have work. As that concern ebbs, they find the emotional space to miss their families more, it seems.

Another concern for which Israelis seem to have more emotional space now is crime. To be fair, the survey was conducted after a series of highly-publicized wife-battering cases and murders within families, and of strangers by strangers in the street for that matter.

The abundance of cases and the lurid press coverage possibly whipped up fear in the Israeli heart. In the survey six months before, only 3% listed crime as their top concern. In the last survey that figure had doubled to 6%. The global average - of crime as top worry - is 3%.

Moving on from health and crime, we find a leap in concerns about education and child welfare. If half a year ago, 6% of respondents cited that as their main concern, that figure has reached 8%.

A common thread that Nielsen found around the world is the way people cut costs as the recession roared. They cut spending on new clothes, entertainment outside the home, and on gasoline and electricity. Regarding entertainment outside the home, fewer Israelis cut spending than elsewhere in the world.

The Israeli consumer also reduced spending, in some cases like everywhere else and in some cases in very different ways. Israelis too attest that they sharply reduced their spending on apparel: Almost 60% of consumers said this was where they economized because of fears about the economic situation. That information tallies with reports from clothing retailers around Israel, from chain outlets at malls to small stores scattered about: All report badly slumping sales this year.

Israelis were more extreme in taking the ax to their telecommunications spending. Nielsen reports that 44% economized on telecoms spending, compared with the global average of 35%. The same proportion, 44% of Israeli respondents, economized on vacation spending, compared with 35% around the world. Also, more Israelis put off buying expensive items for the home such as refrigerators and furniture.

Where did the Israeli consumer not economize compared with the rest of the world?

As said, they by and large continued to consume entertainment outside the home - and continued to smoke.

The world average for cutting back on entertainment outside the home was 53%. This category, including restaurants, movies, shows, and so on, was something that only 47% of Israelis felt they could reduce.

Another area where Israelis economized rather less was spending on gasoline and fuel, but the local figure may have been skewed by the prevalence of people using company cars. Israelis were also less inclined to try to renegotiate their mortgages and insurance premiums, and to cut back on credit-card spending. Elsewhere in the world, an average of 22% of consumers said they were saving in these areas, compared with 18% of Israelis.

It proved a lot easier to persuade the Israeli to adopt private-label brands of foods, which are cheaper, such as a supermarket-brand potato chip as opposed to say Pringles. While around the world 41% of consumers said they were moving to cheaper forms of foods, that figure was 44% in Israel, or almost half the nation's consumers.

Another interesting point is that while Israel is famous for love of gadgetry, in times of trouble, they were comfortable putting off technology upgrades. In the first half of the year 44% said they would wait, but that figure fell to 37% in the latest survey.

And finally, Israelis' confidence is returning, as we can tell from what they choose to do with money left over at month's end. Most people still put it aside for a rainy day. But increasing numbers are opting to spend it on a vacation or to buy clothes, both areas that had been hit hard while the recession was front-page news.