DALLAS -
Southwest Corporate said that on nearly every measurable index it tracks CEOs were feeling a bit rosier during the first quarter, with CEOs showing confidence levels not seen in one year. The survey is conducted every quarter.
According to Southwest Corporate, the CU CEO Confidence Index rose to 41.02 in the March 2007 report-up from 35.12 as measured last December. The confidence index is a compilation of responses measuring credit union CEOs' feelings based on six key issues, with CEOs ranking their forecast on a scale of 1-100. The survey measures attitudes toward:
* Members' current financial condition
* Credit union's current financial condition
* Members' financial condition six months from now
* CU's financial condition in six months
* Loan demand at the CU in six months
* Share deposit growth at the credit union in six months
Also improving in the survey: there were 191 responses to the survey of 605 CEOs-setting a response rate of 32% for the most recent quarter, a new high-water mark for participation in the survey which was launched in 2003, Southwest Corporate said.
The CEOs surveyed also felt encouraged about the expected loan demand at their credit union six months from now-the index rose to 31.51 in March from 22.92 in December. The expected deposit growth also showed significant gain-up from 14.88 in December to 26.04 in the most recent survey.
The only category noting a drop in the survey was the measurement of Credit Union's Current Financial Conditions. That measurement dropped slightly from 58.04 from last December to 57.55 in the most recent survey.
In its analysis, Southwest Corporate noted the upbeat sentiment expressed by credit union CEOs in March runs counter to a nationwide survey of consumer confidence. U.S. consumer confidence weakened in March as higher gasoline prices and recent turmoil in financial markets made Americans nervous about the future.
The Conference Board, for instance, said its consumer confidence index fell to 107.2 in March, from a downwardly revised 111.2 the prior month, with rising gasoline prices and falling stock prices contributing to the slightly more pessimistic mood.
"The first quarter of each year is traditionally a period of time when loan demand takes a hiatus while share growth is stronger due to bonuses, incentives, tax refunds, etc. Therefore, CEOs always have a reason to be optimistic at that time," said Brian Turner, director of Southwest Corporate's Investment Advisory Service. "Last year proved to be a struggle for many credit unions that have seen their net margins narrow mostly from higher cost of funds. Many have an outlook that represents an expectation of lower short-term rates which would help lessen the upward pressure on their costs and hopefully help their net margins.
