September 26, 2023

ABA: Bank Economists See Weakening Credit Conditions Through End of 2024

Bank economists expect credit conditions to weaken over the next six months, according to the American Bankers Association’s latest Credit Conditions Index released today.

The latest summary of ABA’s Credit Conditions Index examines a suite of indices derived from the quarterly outlook for credit markets produced by ABA’s Economic Advisory Committee (EAC). The EAC includes chief economists from North America’s largest banks. Readings above 50 indicate that, on net, bank economists expect business and household credit conditions to improve, while readings below 50 indicate an expected deterioration.

According to the Q4 2023 report, most EAC economists believe that both credit quality and credit availability will weaken over the next six months for both consumers and businesses: 

For the fourth quarter release:

“Top bank economists serving on our Economic Advisory Committee are forecasting weak growth in household spending and business investment over the next four quarters before a modest pickup in the second half of next year,” said ABA Chief Economist Sayee Srinivasan. “Accordingly, ABA’s latest Credit Conditions Index indicates that banks will continue to exercise greater caution in lending decisions until at least the end of the year.”

Read the full report with detailed charts and a discussion of the broader economic context.

About the Credit Conditions Index 

The ABA Credit Conditions Index is a suite of proprietary diffusion indices derived by the American Bankers Association from surveys of bank chief economists from major North American banking institutions. Since 2002, the bank economists have forecasted credit quality and availability for both businesses and consumers, indicating whether they expect conditions to improve, hold steady, or deteriorate over the ensuing six months. Readings above (below) 50 indicate that, on net, these expert business analysts expect credit market conditions to improve (deteriorate). Input from the bank economists is equally weighted in the indices. This data will remain anonymous, but historical index values are available upon request.

Answers to Frequently Asked Questions about the ABA Credit Conditions Index can be found in an Appendix attached to the outlook. This report and all previous reports can be found at

This post was originally published here.