PHILADELPHIA, May 19, 2021 (GLOBE NEWSWIRE) – Second Quarter Results of Phoenix Management’s “Lending Climate in America” Survey Show U.S. Economy Optimism with Short-Term Economic Results Beating Pre-pandemic Predictions for the first time since the country was shut down due to COVID.
Since hitting a record 11-year low in Q2 2020, confidence in the economy in the short term (the next 6 months) has steadily climbed quarter over quarter to reach an average GPA weighted 2.79 in Q2 2021. In addition, lender confidence in the US economy in the long term increased (by 7 percentage points) to 2.36 compared to the previous quarter’s results of 2.29 .
Real GDP declined 3.5% in 2020. When asked, given the current state of vaccine deployments, pandemic-related restrictions (and their potential easing) and stimulus packages, what level of GDP growth is forecast for 2021, 58% of lenders surveyed expect growth of 4 to 5% in 2021. Twenty-one percent of lenders expect less than 2%, while 14% expect a growth of 6 to 7%. Seven percent of lenders surveyed predict GDP growth of 2-3% in 2021.
Phoenix’s survey of America’s lending climate in the second quarter of 2021 asked lenders what macro wind they think could derail the economic recovery. The majority of lenders, 50%, believe that political risk (such as interest rates or the withdrawal of stimulus measures) is most likely to be the macroeconomic headwind that could derail the economic recovery. Twenty-one percent of lenders believe that either a) international supply chain problems or b) vaccine distribution or virus mutation is most likely to be the macroeconomic headwind that could derail the market. economic recovery. Among lenders surveyed, 8% of lenders say consumer caution in reopening the United States is likely to be the macroeconomic headwind that could derail the economic recovery.
Lenders were also polled this quarter to determine whether they believe the United States will return to pre-COVID employment rates by the end of 2021. The vast majority of lenders, 71%, believe many Americans will remain discouraged from entering the workforce due to current COVID unemployment benefits. Twenty-nine percent of lenders say that with the deployment of vaccines, the United States will reach similar pre-COVID unemployment rates by the end of 2021.
“Confidence in the US economy in the near term continues to improve as results exceed pre-pandemic expectations,” said Michael Jacoby, senior managing director and shareholder of Phoenix. “While lenders appear to have confidence in the US economy, the factor considered most likely to derail the US economy is political risk and the majority of lenders are concerned about how current COVID unemployment benefits could deter Americans from entering the workforce. ”
To view the full results of the Phoenix America Lending Climate Survey, please visit https://www.phoenixmanagement.com/lending-survey/
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