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May 25, 2016
Philadelphia, PA (May 25, 2016) —- From the second quarter Phoenix Management Lending Climate in America Survey, results shows a positive long term economy outlook with lenders becoming more optimistic about the U.S. economy in the next 6-12 months.
The 2Q 2016 survey results reversed the previous quarters results of a higher near term GPA than a long term GPA. Lenders confidence on how they expect the U.S. economy to perform during the next 6 months dropped 11 points from a 2.00 to a 1.89. On the contrary, their GPA for the U.S. economy beyond the next 6 months increased 9 points from a 2.02 in Q1 to a 2.11. The majority of lenders (64%) continue to believe that unstable energy prices will have the strongest impact on the economy over the next 6 months.
Lenders have also indicated an increase in the percentage of their customers expecting strong growth in the next 6-12 months, and the percentage of lenders anticipating that their customers will experience no growth decreased by 6 percentage points to 21%.
Lenders were also surveyed this quarter in regards to the Federal Reserves gauge of manufacturing, mining and utility output falling 1.8% in the first quarter, from a year earlier. Although records dating back to 1919 show that industrial production has never decreased so deeply in a year that did not include a recession, 38% of the lenders surveyed believe that the decrease is not a precursor of the U.S. slipping into another recession within the next 12 months. They believe that the decrease in industrial production is misleading as it is largely driven by a decrease in mining due to historically low oil prices. Furthermore, lenders were asked which industries they believe will experience the most volatility over the next 6 months. Garnering the highest amount of results were the 71% of lenders that believe a) mining, and b) retail trade will experience the greatest volatility, while 36% agree on manufacturing.
For the first time since Q4 2014 a small number of lenders believe the economy will perform at an ‘A’ level in the next six to twelve months, and we saw a decrease in the percent of lenders that believe that economy will perform at a ‘D’ level, says Michael Jacoby, Senior Managing Director and Shareholder of Phoenix. Although these movements are modest, we may be looking at a positive turning point for the U.S. economy over the next 6-12 months from the previous quarters increasing pessimistic view.
Click here to view the full results of Phoenix’s “Lending Climate in America” Survey.
About Phoenix:
For over 30 years, Phoenix has been effectively implementing operationally focused business solutions for middle-market companies across all economic situations. Our three service groups work together as stabilizing pillars to deliver creative solutions to unique business challenges. Phoenix Management Services® provides turnaround, crisis and interim management, specialized advisory and operational implementation services for both distressed and growth oriented companies. Phoenix Transaction Advisory Services® provides quality of earnings review, management/organizational review, business integration, sell-side business preparation and other transaction related support. Phoenix Capital Resources® provides special situation banking solutions including M&A advisory, private placements of debt and equity, and complex balance sheet restructurings. Phoenix Capital Resources is a U.S. registered broker-dealer and member of FINRA and SIPC. Proven. Results.®
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