Bank CEOs optimistic about Wisconsin economy

Sentiment and most loan demand improved over 2016

Last updated on July 2nd, 2019 at 09:09 am

Three-quarters of Wisconsin bank CEOs rate the state’s economic health as good, according to a new survey from the Wisconsin Bankers Association. Another 10 percent say the economy is in excellent health, and 15 percent say it’s fair.

Wisconsin Bankers Association survey results.

The sentiment is improved from June 2016, when 66 percent said the economy was in good health, 1 percent said it was excellent and 33 percent said it was fair, according to the Bank CEO Economic Conditions Survey, conducted by the Wisconsin Bankers Association.

In the next six months, 62 percent of respondents said they expect Wisconsin’s economy to remain the same, down from 63 percent last June. About 37 percent expect it to grow, up from 31 percent in June 2016. And 1 percent expect it to weaken, down from 6 percent a year ago.

When asked to forecast hiring levels for the businesses in their market area, 48 percent of respondents said they expect businesses to hire employees, up from 30 percent in June 2016. Another 51 percent expect the businesses to maintain current staffing levels. And 1 percent predict layoffs, down from 4 percent last year.

The bank CEOs also gave insight on loan demand.

The demand for business loans has risen over the past year, with 57 percent of bank CEOs rating it as good. That’s up from 45 percent in June 2016. Another 6 percent rate business loan demand as excellent, up from 5 percent a year ago. Another 31 percent say it’s fair and 5 percent say it’s poor.

In the six-month outlook, 39 percent of respondents expected business loan demand to increase, up from 27 percent in June 2016. Another 56 percent expected it to stay the same, down from 64 percent last year. And 5 percent expected business loan demand to weaken, down from 8 percent a year ago.

Commercial real estate loan demand also has increased in the past year, with 55 percent of the respondents ranking demand as good. That’s up from 42 percent in June 2016. Another 13 percent said CRE loan demand is excellent, up from 10 percent last year. And 26 percent said the demand for CRE loans is fair, down from 44 percent a year ago. Just 6 percent said it’s poor, up from 4 percent in June 2016.

Looking out six months, about 30 percent of respondents expected demand for commercial real estate loans to grow, up from 24 percent in June 2016. Another 60 percent expect it to remain the same, down from 67 percent a year ago. And 10 percent anticipate CRE loan demand will weaken, up from 9 percent last year.

Residential real estate loan demand is down, however. About 18 percent of bank CEOs said it’s excellent, down from 25 percent in June 2016. Another 53 percent said it is good, down from 59 percent a year ago. About 27 percent said residential real estate loan demand is fair, up from 13 percent in June 2016. And 3 percent said it’s poor, flat year-over-year.

In the next six months, 24 percent of the bank CEOs predicted residential loan demand will grow, down from 30 percent. About 57 percent expect it to stay the same, flat year-over-year. And 20 percent expect it to weaken, up from 13 percent last year.

“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,” said Rose Oswald Poels, president and chief executive officer of the WBA. “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.”

Read more economic data reports at the BizTracker page.

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Molly Dill, former BizTimes Milwaukee managing editor.

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