October 6, 2016

Phoenix Lending Survey Results Shows a Shift on the Outlook of the U.S. Economy

Philadelphia, PA (October 6, 2016) —- From the third quarter Phoenix Management “Lending Climate in America” Survey, results shows a shift on lenders outlook on the U.S. economy in both the near and long term.

The 3Q 2016 survey results continue the trend towards more pessimism on longer term economic performance than near term performance. Lenders confidence on how they expect the U.S. economy to perform during the next 6 months increased from a 1.89 in Q2 to 1.93. On the contrary, their GPA for the U.S. economy beyond the next 6 months significantly decreased 21 points from a 2.11 in Q2 to a 1.90. Lenders were also surveyed this month regarding the performance of the U.S. economy under our next president. The majority of lenders (63%) believe that the economy will perform better under the leadership of Trump and Pence, while only 37% of lenders surveyed believe that the U.S. economy would perform better under the leadership of Clinton and Kaine.

Lenders have also indicated a change in the factors with the strongest potential to affect the near-term economy. The stability of the stock market continues to top the list with 43% of lenders favoring this factor. However, 39% of lenders believe that each of a) the sluggish housing market (11percentage point increase from Q2) and, b) the U.S. budget deficit (32 percentage point increase from Q2) will have the strongest potential to affect the U.S. economy in the near-term. Lenders also believe that the presidential election will be a meaningful factor that will affect the U.S. economy in the next 6 months.

In addition, Lenders were surveyed this quarter in regards to which economic factor/metric will have the greatest impact on the FOMC’s decision whether or not to raise short-term interest rates during its September meeting. Garnering the highest amount of responses, 37%, were the lenders that believe the unemployment rate will have the greatest impact on the FOMC’s decision regarding short-term interest rates. Furthermore, lenders were asked in which direction they believe the Fed would move interest rates and by how much in the coming six months. Although 67% of respondents favored +1/4 point, there was an increase of lenders (24%) favoring +1/2 point from Q2’s results of 11%. In a statement released in regards to the September meeting, the FOMC expressed confidence in regards to economic growth, but decided to leave rates unchanged for the time being.

“There is lots of economic uncertainty in the marketplace, and it will indeed be interesting to see how lenders outlook on the U.S. economy changes after the presidential election in November” says Michael Jacoby, Senior Managing Director and Shareholder of Phoenix.

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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