Learn about our latest milestones and business engagements.
October 14, 2021
Philadelphia, PA (October 14, 2021) — From the third quarter Phoenix Management “Lending Climate in America” survey results reveals a weakened U.S. economy in the near and long term.
After a brief resurgence, lenders displayed a more adverse outlook and assessment of the U.S. economy for the near and long term. The GPA for the U.S. economy in the near term significantly decreased 56 percentage points to 2.23 from the Q2 2021 results of 2.79. Additionally, lenders optimism of the U.S. economy in the long term weakened, decreasing 13 percentage points to a 2.23 from the previous quarter’s results of 2.36.
August had the fewest number of new workers in the last seven months. When asked as we move forward into Q4’21 and 2022, do you expect the job market to slowly bounce back, 77% of lenders surveyed believe that even with the delta variant, the job market will likely bounce back as the holiday season approaches. Twenty-three percent of lenders believe the surge of the delta variant will lead to hiring freezes as a precaution for a potential shutdown.
Phoenix’s Q3 2021 “Lending Climate in America” survey asked lenders what factor they expect to be the most challenging for borrowers. Of the lenders surveyed, 62% of lenders expect supply chain management to be the most challenging factor, while 38% expect labor costs to be the most challenging factor for borrowers through the first quarter of 2022.
Lenders were also surveyed this quarter to determine how borrowers are currently combatting inflationary pressure. The vast majority of lenders, 77%, believe borrowers are currently combatting inflationary pressures by raising their prices and limiting discounts offered to customers. Fifteen percent of lenders believe borrowers are absorbing the margin compression on a temporary basis, while 8% believe borrowers are reducing operating expenses and/or eliminating waste to combat inflationary pressure.
“Confidence in the near-term U.S. economy weakened after a brief resurgence earlier this year,” says Michael Jacoby, Senior Managing Director and Shareholder of Phoenix. “While lenders seem to be uncertain about the U.S. economy in the near and long term, the majority of lenders surveyed believe that even with the delta variant, the job market will likely bounce back which is positive as we enter Q4/21 and the holiday season.”
To see the full results of Phoenix’s “Lending Climate in America” Survey, please visit http://www.phoenixmanagement.com/survey/
About Phoenix:
For 35 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 for both distressed and growth-oriented companies. Phoenix Transaction Advisory Services® provides quality of earnings, operational diligence, Quality of Enterprise®, management/organizational reviews, business integration, sell-side business preparation and other transaction related support. Phoenix Capital Resources® provides seamless investment banking solutions including M&A advisory, complex restructurings and capital placements. Phoenix Capital Resources is a U.S. registered broker-dealer and member of FINRA and SIPC. Proven. Results.®
If you would like to learn more about Phoenix, please visit http://www.phoenixmanagement.com or http://www.phoenixcapitalresources.com.
Tags: Coronavirus, COVID-19, Economic Outlook, Lenders
View by Year