Daily News: June 12, 2014

Phoenix Management: Lenders Remain Optimistic on Economy

From the second quarter Phoenix Management “Lending Climate in America” Survey, results show that lenders sentiment towards U.S. commercial lending was equal to last quarter’s strong reading of 45%. The high level of confidence in lender’s domestic sentiment is an indication that banks continue to be encouraged by the economic environment in the U.S.

This quarter’s diffusion index, which measures lenders sentiment towards loan losses, bankruptcies, unemployment and bank failures, showed that all four categories once again have negative diffusion indexes of 26, 33, 37 and 42 percentage points, respectively. The negative diffusion indexes indicates lenders continue to believe there will be limited negative news in these four categories, as all categories remain at or near all-time lows for the survey.

In addition, lenders expect to maintain loose loan structures over the next six months and believe housing remains the biggest threat to continued economic success with 47% choosing a sluggish housing market compared to fifty percent in the previous quarter.

“It’s encouraging to see that lenders continue to remain optimistic on the long term prospects for the U.S. economy,” says Michael Jacoby, senior managing director and shareholder of Phoenix. “In the survey, forty-seven percent of lenders believe the economy will perform at a “B” level in the next six to twelve months, which is eighteen percentage points higher than the previous quarter.”

To see the full results of Phoenix’s “Lending Climate in America” Survey, please visit http://www.phoenixmanagement.com/survey/.