Lenders believe the coronavirus pandemic will be the leading economic driver in 2020, according to a survey from Phoenix Management.

Among those surveyed, 40% said the coronavirus along with other factors will be the largest driver of economic performance. In addition, 27% of lenders believe U.S.-China trade negotiations will be the largest driver, while 13% believe U.S. presidential race implications and monetary policies will be the largest driver of economic performance.

The survey also asked lenders if they believe consumer behavior will be the key to a strong economy. A majority of responders (93%) think consumer behavior will be the foundation for a strong economy. Of the lenders surveyed, 7% disagree and believe factors other than consumer behavior will be responsible for a strong economy.

“Hard to believe that these results were tabulated less than a mere five weeks ago,” Michael Jacoby, senior managing director and shareholder of Phoenix Management, said. “How the world has changed. It is interesting that 40% of the respondents believed the coronavirus would be the largest driver of economic performance. You can say that again. Ditto for 93% agreeing that consumer behavior drives the economy. We have a very long road ahead [of] us. Working together, we will rebuild and continue to accomplish great things.”

The outlook for the U.S. economy saw a slight increase for both the near and long-term. The near-term grade point average (GPA) increased 13 percentage points to 2.57 from the Q4/19 results of 2.44. While the projected outlook for the U.S. economy in the long-term had been on a steady decline, forecasted performance improved slightly in Q1/20. Optimism of the U.S. economy in the long-term improved, increasing 14 percentage points to a 1.79 from the previous quarter’s results of 1.65.

Lenders also were surveyed this quarter on whether they believe the U.S.’s GDP will match 2019. Among responders, 67% believe that the GDP will grow at the same annualized rate of 2.1% in 2020 as it did throughout 2019. Of the lenders surveyed, 20% believe the GDP will rise modestly and 2020 will end with a 0.3% to 0.5% increase. Thirteen percent of lenders believe the third and fourth quarter in 2020 will underperform and GDP will sharply decline.

Phoenix Management Services provides turnaround, crisis and interim management, and specialized advisory for both distressed and growth-oriented companies. Phoenix Transaction Advisory Services provides quality of earnings, operational diligence, Quality of Enterprise, business integration, sell-side business preparation and other transaction related support. Phoenix Capital Resources provides investment banking solutions including M&A advisory, complex restructurings and capital placements.