PLANO, Texas—After three consecutive quarters of growing confidence in the economy, credit union CEOs’ optimism took a small step backward, according to Catalyst Corporate Federal Credit Union’s Third Quarter 2014 Credit Union CEO Confidence Survey. The pessimism comes at the same time credit unions are reporting robust numbers, as can be seen here.
The Credit Union CEO Confidence Index now stands at 31.29, down from 32.94 in the second quarter of 2014. Even with the decline, the current index is still the highest in seven years, with the exception of the Q2 2014 index. The Present Situation Index declined to 31.57 from 32.76 in the second quarter, while the Expectations Index weakened to 31.15 from 33.03.
“Some of the weakening in confidence could be attributed to the uncertainty created by the recent Ebola scare in the U.S.,” said Steven Houle, Director of Catalyst Strategic Solutions’ Advisory Service. “Other likely factors include continued political tension around the globe, particularly in the Ukraine and Russia, and the economic slowdown in Europe and Asia.”
CEOs’ outlook on the economy retreated across the board, regarding both the financial condition of their credit unions and the financial condition of their members, Catalyst Corporate reported. Assessment of their institutions’ current condition declined slightly to 37.23 from 37.61, while expectations for their institutions’ condition over the next six months experienced a greater drop to 42.80 from 45.64 the previous quarter. CEOs’ assessment of their members’ current financial condition fell to 25.97 from 27.95, while expectations for members’ future financial condition dropped more than four points to 29.53 from 33.64 – the largest decline in the recent survey.
The survey also found that CEO expectations for loan demand increased by almost two points over the previous quarter; expectations for share deposit growth fell by 2.66 points.
Catalyst Corporate’s quarterly confidence survey – started a decade ago – was sent to 2,247 credit union CEOs across the nation in October 2014; 233 credit union professionals responded, for a response rate of 10.37 percent.
Using a scale ranging from negative (-100) to positive (+100), respondents registered their confidence levels in six key areas to create an overall index, as well as a snapshot of present-day feelings and future expectations. The areas CEOs were asked to evaluate are:
- Current financial condition of members
- Current financial condition of credit union
- Anticipated financial condition of members in six months
- Anticipated financial condition of credit union in six months
- Anticipated loan demand at the credit union in six months
- Anticipated share deposit growth at the credit union in six months