(Madison) – Bankers’ growth predications for 2017 came true, according to a trend analysis of the latest Wisconsin Bankers Association (WBA) Bank CEO Economic Conditions Survey. In December 2016, bank CEOs predicted a growth in the economy and steady loan demand in most categories. The latest survey responses reflect that sentiment with more bankers saying Wisconsin’s economy is “excellent.”
“Wisconsin’s bankers have a unique perspective on the economy. Their knowledge is fueled by their efforts in helping local businesses grow and families prosper,” explained Rose Oswald Poels, WBA president and CEO. “Bankers are able to understand Wisconsin’s economic trends and in turn use that information to help their communities prosper.”
“It helps that loan demand has been very healthy in Wisconsin for the past couple of years which is always a key indicator that our state’s economy continues to do better,” Oswald Poels added.
Last December, 58% of bankers responded that the Wisconsin’s economy would grow. This prediction has become reality as 10% of current survey respondents believe Wisconsin’s economy is “excellent” compared to just 1% last December. Seventy-five percent of respondents in both timeframes categorized the economy to be “good.”
Hiring trends are virtually tied with 51% of bankers saying businesses in their area will maintain staffing levels and 48% say they will hire. This is compared to last December where 59% of bankers believed businesses would remain with the status quo in terms of staffing with only 39% were optimistic on hiring trends.
Thirteen percent of bankers responding to the survey saying the current demand for commercial lending is “excellent” compared to 8% in December. The number of bankers who stated that loan demand is “good” was 55% for both December and June.
The demand for business loans is equally positive with 6% saying that loan demand is “excellent” (an increase from 1%) and 57% labeling it as “good” (an increase from 48%).
Residential real estate loan demand also saw an increase with 18% of bankers saying it is “excellent” (an increase from 13%) and 53% marking it as “good” (an increase from 50%).
One area bankers continue to watch is agricultural loan demand which is currently seen as fair according to 56% of respondents. Agriculture is a cyclical industry and many farmers are in a “sustain and maintain” mode within their business model. Many ag bankers believe a solution to spur loan demand and provide relief to this sector is lowering the cost of loans through targeted tax exemptions which would also encourage job growth in rural areas of the state.
In all four loan categories (agricultural, commercial lending, business loans and residential real estate), 50% or more of respondents believe loan demand will stay the same for the rest of 2017.
The June 2017 version of this survey was conducted during the first two weeks of June with 101 respondents.
Charts and data from the survey are available upon request.