The second quarter Phoenix Management “Lending Climate in America” survey results reveal supply chain disruptions and continued inflation to be the biggest concerns for consumers and the U.S. economy.

Phoenix’s Q2 2022 “Lending Climate in America” survey asked lenders to identify that greatest risk to the U.S. economy. Fifty-six percent of the lenders surveyed believe supply chain disruptions will be the greatest risk to the U.S. economy. Of the lenders surveyed, 22 percent believe federal reserve policy will be the greatest risk, while 17 percent believe rising interest rates will be the greatest risk to the U.S. economy. Five percent of lenders stated that tight labor markets will be the greatest risk.

The impact of continued skyrocketing inflation is causing businesses to pass on the rising costs to the consumers. When asked, whether we will start to see inflation level-off in the next few months, 72 percent of lenders expect inflation to continue rising, which will cause further economic stress in the U.S. by forcing consumers to decide which goods and services are no longer worth buying. Twenty-eight percent of lenders think we will start to see inflation level off in the next few months.

Additionally, Phoenix’s “Lending Climate in America” survey asked lenders to identify how their customers are responding to supply chain challenges. Of the lenders surveyed, 44 percent indicated their customers are responding to supply chain challenges through strategic stockpiling. Twenty-eight percent of lenders cited their customers are responding to supply chain challenges by a) adding suppliers from new geographies or b) paying more to ensure timely delivery.

Lenders’ optimism in the U.S. economy in the short term decreased 10 points this quarter from 1.77 in Q1 2022 to 1.67 in Q2 2022. The majority of lenders (39 percent) believe the economy will perform at a “C” or “D” level during the next six months and lenders who believe the economy will perform at a “D” over the next 12 months increased from 15 percent to 28 percent. However, lender expectations for the U.S. economy’s performance in the longer term increased from the prior quarter from 1.92 to 2.11.  

“Lenders’ optimism for the U.S. economy in the near-term continues to decrease” said Michael Jacoby, Senior Managing Director and Shareholder of Phoenix. “The majority of lenders believe that supply chain disruptions will be the greatest risk the economy and that their customers are planning to begin strategic stockpiling as a way to combat these challenges.”

To see the full results of Phoenix’s “Lending Climate in America” Survey, visit http://www.phoenixmanagement.com/survey/.