A year ago, 71% of Wisconsin bank CEOs said a recession was likely or very likely in the next six months. Just 24% hold those views now, according to the latest Wisconsin Bankers Association survey
While a majority of Wisconsin bank CEOs describe the state’s economy as good or excellent, most also expect to see little change in the economy in the coming months. A plurality, 43%, also now say a recession is unlikely in the next six months.
The Wisconsin Bankers Association surveyed 66 bank CEOs in the state from May 21 to June 21.
The survey found 71% of the CEOs rate the state economy as good and another 5% describe it as excellent.
However, 70% of respondents expect the economy to remain the same over the next six months, compared to 8% expecting growth and 23% expecting the economy to weaken.
The results from the most recent survey show a significant shift from the past two surveys, conducted at the end of 2023 and about a year ago.
In those surveys, CEOs were nearly evenly split on whether the economy would stay the same or weaken.
Their outlook on inflation, however, suggests it will not trend downward with 66% predicting it will stay the same. At the end of 2023, 48% of CEOs surveyed expected inflation to fall over the next six months.
The hiring outlook has improved some with 23% of bank CEOs now expecting businesses in their market to increase staffing in the next six months, up from 11% at the end of 2023. However, 67% still staffing to remain the same, down from 77%.
As for current loan demand, CEOs have seen improvement across business lending, commercial real estate and residential real estate.
On business lending, 49% say demand is good, up from 36% at the end of 2023. Going forward, two-thirds expect business lending to remain the same and 26% say it will weaken. The percentage expecting business lending to grow fell from 14% at the end of 2023 to just 8% now.
On commercial real estate, 54% of CEOs described demand as fair, up from 48% at the end of 2023. Another 37% described it as good, up from 30% at the end of 2023. The percentage describing it as poor fell from 12% to 6%.
Going forward, 66% expect CRE loan demand to stay the same, up from 50% at the end of 2023. The percentage expecting it to weaken fell from 41% to 27%.
For residential real estate, 22% now describe demand as good and another 6% say it is excellent. At the end of 2023, just 13% said it was good and none said excellent. A year ago, those figures were 14% and 5%.
Still 38% of bank CEOs say residential real estate loan demand is poor.
Going forward, 29% expect residential demand to grow over the next six months, up from 20% at the end of 2023 and 13% a year ago.
