PLANO, Texas (11/20/14)--Credit union CEO optimism declined slightly after three straight quarters of increasing confidence in the economy, according to results of Catalyst Corporate FCU's third quarter 2014 Credit Union CEO Confidence Survey.
|Catalyst Corporate FCU Graphic|
The Credit Union CEO Confidence Index now stands at 31.29, down from 32.94 in the second quarter. Even with the step back, the current index is still the highest in seven years, with the exception of last quarter's 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 for the economy decreased regarding both the financial conditions of their credit unions and of their members. 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 indicated 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.
David Green, president/CEO of the $630 million-asset Contra Costa FCU in Martinez, Calif., said his sentiments reflect the survey results. He cited a disconnect between Washington economists who only look at the numbers and credit union CEOs who look at their individual members' financial conditions. "A Google employee, for example, with great salary and benefits offsets a long-term unemployed person when only looking at the gross numbers," Green said. "On the other hand, we see members losing their purchasing power every day, because their salaries are not keeping up with higher prices, especially with healthcare and technology products, such as phones and tablets."
Catalyst Corporate's quarterly confidence survey 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%.
Using a scale ranging from negative 100 to 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 included: