Spanish and Portugese risk managers are particularly fearful of a recession
A majority (79%) of respondents to the European Credit Risk Survey forecast a new recession in Europe in 2012.
The survey, conducted by analytics provider FICO, queried credit risk management professionals in January and February.
Opinions on the likelihood of a new European recession varied by market. In Germany, Austria and Switzerland just 45% of respondents forecast recession, and in the UK and Ireland, the count went down to 40%.
However, 76 % of respondents in Central and Eastern Europe said a new European recession is likely this year.
A stunning 100% of Spanish and Portuguese respondents agreed that their own country would enter a new recession in 2012.
More than half (53%) of respondents in the UK and Ireland forecast a local recession, compared with just 25% from Germany, Switzerland and Austria.
The housing market is likely to see an especially tough year, according to respondents. Asked if it would end the year stronger than it is now, just 2% answered “yes”.
“We don’t see housing markets improving until job markets improve, and right now the forecast looks rocky at best,” said Mike Gordon, FICO vice president and managing director for Europe, the Middle East and Africa.
“These forecasts echo those in our recent survey of US credit risk professionals, who said housing prices would not return to pre-recession levels until at least 2020. In countries like the US and the UK, the housing market also won’t rebound until the backlog of distressed properties is cleared out.”
Patrick Desmarès, secretary general of Efma, added: “With the Eurozone sovereign debt crisis still playing out, bankers have every reason to be pessimistic. Until the political situation at the core of Europe is resolved, or the global economy improves to the point where it lifts European markets, confidence among bankers and consumers will be at a low ebb.”
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