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April 7, 2011

Phoenix Survey: Unstable Energy Costs a Concern

Economic optimism continues, but new concerns developing

PHILADELPHIA (April 7, 2011) —- Results of the first quarter 2011 Phoenix Management “Lending Climate in America” Survey continue to signal optimistic economic trends, specifically in near-term capital investment and macroeconomic events. The survey also suggested increasing awareness of raw material costs and legacy housing issues as potential lender concerns.

Anticipated capital investments stood out as the most improved quarterly index. 58% of respondents indicated that they feel their customers will be making new capital investments in the next six months (versus 38% in the previous quarter). Respondents also responded favorably to the belief that customers will be introducing new products or services in the next six months (increase of 13% from the prior quarter) and hire new employees during the next six months (13% higher than the prior quarter as well).

“The results correlate with what we are finding in the marketplace. We”ve seen a more aggressive lending stance from lenders and private equity partners in the past few months,” says Michael E. Jacoby, Phoenix Senior Managing Director and Shareholder.

Also highlighted in this quarterly survey, respondents feel that near term loan losses will subside due to improving macroeconomic conditions (an increase of 28% over last quarter). Unemployment also showed signs of improvement as 45% of respondents believe the rate of unemployment will decline in the near term (as compared to 19% last quarter). Other components of the macroeconomic diffusion index showed similar improvements over the prior period.

The survey audience still projects trepidation surrounding rising raw material prices (62% are somewhat concerned and 29% are very concerned) and the housing market. Asked about factors with the strongest near-term potential to affect the economy, 56% of respondents selected unstable energy prices (compared to 23% last quarter) and 42% selected the housing market (44% in the prior period).

Overall, the survey projected confidence building quarter-over-quarter in the majority of indices, however new concerns are mounting.

To see the full results of Phoenix’s Lending Climate in America Survey, please visit

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.

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