A majority of Wisconsin bank CEOs no longer see a recession as likely within the next six months, a dramatic shift from earlier this year, according to the latest survey from the
Wisconsin Bankers Association.
In the WBA’s mid-year survey, 56% of respondents said a recession was likely in the next six months and another 15% said it was very likely for a total of 71%. By comparison, in the end of 2022 survey, 87% of respondents said a recession was likely or very likely in the next six months.
However, in the most recent survey, conducted Nov. 14 to Nov. 29 with 66 respondents, just 9% said a recession was very likely and 32% said one is likely.
In a separate question, 47% of respondents said they expect the Wisconsin economy to stay the same over the next six months and 44% said they expect it to weaken. A year ago, 72% of Wisconsin bank CEO survey respondents expected the economy to weaken.
The most recent survey found only 9% of bank CEOs in the state expecting the Wisconsin economy to grow over the next six months.
While the CEOs were more optimistic about the outlook, they were slightly more pessimistic about the current state of Wisconsin’s economy. A little more than a quarter, 27%, rated the economy as fair, the same percentage as in the mid-year survey. However, another 5% described it as poor, up from zero in the mid-year.
Most surveyed Wisconsin bank CEOs, 77%, said they expect businesses in their market to maintain current staffing levels, up from 69% in the mid-year survey. Another 12% expect businesses to lay off employees, up from 6% in the mid-year.
The number of CEOs expecting their local businesses to hire additional employees declined from 25% in the mid-year to 11% in the current survey.
Across lending categories, CEOs said demand for loans was worse than it was in the mid-year survey.
The percentage describing business loan demand as "good" or "excellent" declined from 50% to 41%.
For commercial real estate loans, 39% described demand as "good" or "excellent," down from 44%.
In the residential real estate category, 59% said demand is "poor," up from 31% over the summer and 55% at the end of 2022. Just 13% said residential demand is "good" and 0% said "excellent."
For agricultural loans, 20% described demand as "good" or "excellent" compared to 41% this summer and 25% a year ago.
Over the next six months, the outlook for loan demand improved from the mid-year survey, although more than half of respondents across business, commercial real estate, residential real estate and agricultural lending expect demand to stay the same. In the mid-year survey, more than half expected business and CRE demand to weaken.
