Credit unions will remain healthy during the next year, as memberships continue to grow, CUNA Mutual Group Chief Economist Steve Rick predicted Tuesday.
“The economy will continue to grow,” Rick said at the CUNA Mutual Group’s annual Discovery Conference. “There won’t be a recession.”
Credit union membership is expected to increase 3.8% this year, slowing somewhat to 3.3% next year, Rick said. “Our membership growth has been on a tear,” Rick said.
Credit unions will have stronger balance sheets, but weaker income statements during the next year. Credit unions are likely to see a 9% increase in loans, Rick said, adding, “We’re going into a credit boom the likes of which we haven’t seen in more than a decade.
The economy is expected to grow in 2.4% in 2017—faster than the 1.6% this year, he predicted. That growth is driven—in part—by growth in home construction, which is expected to grow 6%.
“We have a shortage of homes in this nation,” Rick said.
Unemployment is expected to fall to 4.7%, which Rick said is basically considered full employment. Rick said that low unemployment will mean that credit unions will have problems hiring and keeping employees.
On the other hand, he said, people will be purchasing more vehicles.
Vehicle sales are expected to reach a record 17.75 million next year, with home sales totaling some 5.9 million homes.
Loan delinquency rates will be about 75 basis points, according to Rick. “Our balance sheets will be strong,” he added.
Rick predicted that the Federal Reserve will increase interest rates a quarter of a percent before the end of the year, followed by three increases during 2017—resulting in about a 1% increase.
