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Lenders Predict Volatility in Retail, Finance

According to the Phoenix Management “Lending Climate in America” survey, lenders no longer consider construction the most volatile industry

A survey of lenders has pegged the retail, finance and insurance sectors as the most likely to experience volatility in the next six months.

Results from the fourth quarter Phoenix Management "Lending Climate in America" survey imply that construction is no longer the industry most likely to experience volatility in terms of chapter 11 filings, M&A and declining profits.

Of the lenders asked through the survey, 48 percent said retail would experience the most volatility, an increase of nine percent from the last quarter. With consumers still considered to be cash-strapped in 2013, observers predict that disposable income will continue to be squeezed. Finance and insurance were predicted to be the second most volatile industries, with 38 percent of lender responses.

The construction industry, which had remained in first place for the past two years, was predicted as the third most likely industry to experience volatility. The percentage of lenders who thought construction would be the most volatile dropped from 61 percent in the previous quarter to 28 percent.

The healthcare and social assistance industry, along with the mining sector, each received 27 percent of total responses. Mining increased eight percentage points from last quarter, while healthcare and social assistance declined by eight percentage points.

The survey also found that lenders believe an uptick in bankruptcies and loan losses will come in the near future.

Phoenix, based in Chadds Ford, Penn., provides turnaround, crisis and interim management, specialized advisory and due diligence services.

-ALLISON COLLINS


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