Press Releases

Learn about our latest milestones and business engagements.

November 2, 2011

Lenders Predict Trouble Ahead Shows Phoenix Survey

Results Down From Previously Positive Indicators

CONTACT: Michael Jacoby
610-358-4700
mjacoby@phoenixmanagement.com

PHILADELPHIA (November 3, 2011) —- Results of the third quarter Phoenix Management “Lending Climate in America” Survey signals that lenders expectations regarding major economic and lending indicators declined as compared with the previous quarter.

The overall index for all domestic lending segments decreased by fifty one percentage points in comparison to last quarter’s survey. Respondents indicated that, on average for all domestic lending categories, only twenty two percent expect increased loan demand (versus fifty six percent in the prior quarter). Seventeen percent of lenders in Q3 2011 anticipate overall domestic lending to decline, compared to zero percent in the previous quarter. All three major domestic commercial lending categories including corporate, middle market and small business experienced significant pull back in sentiment in Q3 2011 versus the prior quarter.

Responses to other questions were just as pessimistic. Forty four percent of respondents” customers anticipate making new capital investments in the next six months (down twenty five percentage points from the previous survey). Forty percent also anticipate their customers to introduce new products or services in the next six months; six percentage points lower than in Q2 2011. Thirty five percent responded their customers are planning on making an acquisition; lower by nineteen percentage points from the previous quarter. Lenders expectations for economic growth declined for the next six months compared to the previous survey. As a result of the current economic outlook, lenders economic growth expectations fell by nearly a half letter grade to “D+” levels compared to the previous survey. We have not seen this low of a grade since 3rd quarter of last year. This drop off may imply that we are in for a double dip. Lenders expectations of the three major macroeconomic indicators (loan losses, bankruptcies and unemployment) all weakened versus the previous quarter.

“I was not expecting such negative indications from lenders this quarter,” says Michael Jacoby, Phoenix Senior Managing Director and Shareholder. “While I anticipated seeing an overall decline in domestic lending, it was a surprise to see that it dropped by fifty-one percentage points in comparison to last quarter’s survey. I can”t recall seeing such a large decline.”
To see the full results of Phoenix’s “Lending Climate in America Survey”, please visit http://www.phoenixmanagement.com/survey/

About Phoenix

For over 25 years, Phoenix has provided smarter, operationally focused solutions for middle market companies in transition. Phoenix Management Services provides turnaround, crisis and interim management, specialized advisory and operational due diligence services for both distressed and growth oriented companies. Phoenix Capital Resources provides seamless investment banking solutions including M&A advisory, complex restructurings and capital placements. Proven. Results.®
Visit www.phoenixmanagement.com & www.phoenixcapitalresources.com

View by Year