Most Wisconsin bank CEOs expect economy to stay the same over next six months

Last updated on December 30th, 2021 at 01:40 pm

In the middle of the year, the chief executive officers of Wisconsin banks were split on the outlook for the state’s economy. Almost half, 48%, expected growth in the second half of the year while 39% expected the economy to weaken.

Fast forward six months and there is more consensus among Wisconsin bank CEOs with 64% expecting the state’s economy to stay the same over the next six months, according to the latest survey from the Wisconsin Bankers Association. Another 21% expect the economy to grow while 15% expect it to weaken.

“As industries rebound — including tourism, manufacturing, construction, and agriculture — economic stability is taking hold,” said Rose Oswald Poels, president and CEO of the WBA.

The survey had 80 respondents and was conducted Dec. 14 to Dec. 24.

Respondents did sour slightly on the current health of Wisconsin’s economy. In the mid-year survey, 91% rated the economy excellent or good, a figure that fell to 79% in the current survey. The end-of-year result is a substantial improvement over the end of 2020 when 42% described the state’s economic health as good or excellent.

The CEOs did note improved demand for business loans. In the mid-year survey, 40% described business lending demand as excellent or good, a figure that climbed to 57% by the end of the year.

Residential real estate lending dipped from 88% describing it as excellent or good in the mid-year to 73% at the end of the year. At the end of 2020, 92% of bank CEOs described it as excellent or good.

Agriculture lending also saw a weakening with 23% describing it as excellent or good, down from 36% in the mid-year survey.

Commercial real estate lending demand was nearly flat with 55% describing it as excellent or good, down from 57% in the mid-year but up from 34% at the end of 2020.

A majority of CEOs expect demand for business, commercial real estate and agriculture lending to stay the same over the next six months.

However, beyond those majorities there is some pessimism among the respondents. Business lending, for example, saw a 15-point drop compared to the mid-year survey, from 43% to 28%, in CEOs expecting growth and a 7-point increase, from 7% to 14%, in those expecting a weakening.

In commercial real estate lending, the percentage expecting growth dropped from 31% in the mid-year survey to 24%, an 8-point drop. The percentage expecting a weakening climbed 13 points from 8% to 21%.

A majority of CEOs, 56%, expect residential real estate loan demand to weaken in the next six months, up from 41% in the mid-year survey. Just 11% expect growth in the category, down from 14% in the mid-year survey.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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