Wisconsin Bank CEOs Weigh in on Inflation and Possibility of Recession

WBA Releases Results of Bank CEO Economic Conditions Survey

In the Wisconsin Bankers Association’s biannual Economic Conditions Survey of Wisconsin bank CEOs, 71% of respondents rated Wisconsin’s current economic health as “excellent” or “good.This marks a decline from the mid-year 2021 survey, when 91% of survey respondents gave “excellent” or “good” ratings. Nearly all (over 98%) of the Wisconsin bank CEOs who completed the most recent survey predict that the economy will stay the same or weaken in the next six months. 

“Wisconsin bank CEOs have a unique vantage point in that they are both financial experts and highly involved individuals in their local communities,” said WBA President and CEO Rose Oswald Poels. “While the economy remains relatively stable, bankers are keeping a close eye on important indicators and stand ready to support their customers through possible economic challenges over the coming months. 

Among the economic bright spots cited by bank CEOs in the survey were strong tourism, construction, manufacturing, and agricultural industries. Survey results indicate that the hiring market and real estate market are cooling down. Top economic concerns reported by bank CEOs were inflation, cost of living/childcare/education, rising interest rates, oil and gas prices, staffing shortages, and the war in Ukraine.

The midyear 2022 survey was conducted May 24–June 10 with 56 respondents. Sums may not equal 100 percent due to rounding. Below is a breakdown of the survey questions and responses.

Wisconsin Bank CEO Economic Conditions Survey Results
How would you rate the current health of the Wisconsin economy. . .  Mid-Year 2022  End-of-Year 2021  Mid-Year 2021 
Excellent  7%  6%  15% 
Good  64%  73%  76% 
Fair  29%  20%  10% 
Poor  0%  1%  0% 
         
In the next six months, do you expect the Wisconsin economy to. . .        
Grow  2%  21%  48% 
Weaken  63%  15%  39% 
Stay the same  36%  64%  13% 
         
Over the next six months, do you expect inflation to. . .       
Rise  50%     
Fall  22%     
Stay about the same  28%     
       
How likely would you say a recession is in the next six months?       
Very unlikely  4%     
Unlikely  16%     
Neutral  20%     
Likely  45%     
Very likely  16%     
       
Rate the current demand in the following categories:        
Business Loans        
Excellent  2%  9%  10% 
Good  48%  48%  30% 
Fair  48%  39%  52% 
Poor  2%  5%  8% 
         
Commercial Real Estate Loans        
Excellent  7%  11%  13% 
Good  52%  44%  44% 
Fair  36%  41%  33% 
Poor  5%  4%  10% 
         
Residential Real Estate Loans        
Excellent  2%  25%  40% 
Good  20%  48%  48% 
Fair  50%  24%  12% 
Poor  29%  3%  0% 
         
Agricultural Loans        
Excellent  2%  1%  2% 
Good  37%  22%  34% 
Fair  51%  58%  56% 
Poor  10%  18%  8% 
         
Deposit       
Excellent  5%     
Good  55%     
Fair  38%     
Poor  2%     
       
In the next six months, do you anticipate the demand for the following categories will. . .        
Business Loans        
Grow  11%  28%  43% 
Weaken  48%  14%  7% 
Stay the same  41%  59%  51% 
         
Commercial Real Estate Loans        
Grow  13%  24%  31% 
Weaken  48%  21%  8% 
Stay the same  39%  55%  31% 
         
Residential Real Estate Loans        
Grow  4%  11%  14% 
Weaken  63%  56%  41% 
Stay the same  34%  33%  46% 
         
Agricultural Loans        
Grow  6%  15%  18% 
Weaken  31%  14%  6% 
Stay the same  63%  71%  76% 
         
Deposit       
Grow  11%     
Weaken  36%     
Stay the same  53%     
       
In the next six months, are the businesses in your bank’s market area likely to. . .        
Hire employees  31%  68%  82% 
Maintain current staffing levels  61%  33%  15% 
Lay off employees  7%  0%  3% 
         
In the next six months, is your bank likely to. . .        
Hire employees  34%  55%  48% 
Maintain current staffing levels  63%  43%  45% 
Lay off employees  4%  3%  6%