$700B in Assets by Summer 2005: Is Your Forecast on Target?

CUNA is forecasting industry assets will reach $700 billion this summer. This figure only begins to tell the story when compared to total industry assets 10 years ago.

 
 

CUNA’s Chief Economist Bill Hampel is forecasting credit union assets to reach $700 billion this summer, a figure that only begins to tell the story when compared to total assets for the industry 10 plus years ago. In 1994 total assets for the entire industry stood at $302.5 billion – less than half of where we should be this summer. From 1994 to 2004 total assets have grown roughly 9% per year. Comparing total assets over 10 years offers some perspective of growth. Examining the specific asset mix provides better insight into where the growth has occurred and, perhaps more importantly, whether this information is useful in creating estimates for forecasts. (See graphs below for a 10-year comparison of asset breakdown).

In 2004 real estate loans were almost 30% of the asset mix, compared with 21.5% in 1994. What (if anything) does this data tell us about the next 10 years? Continuing the “onion peel” on real estate provides more information—fixed rate mortgages nearly doubled their percentage from 10.92% in 1994 to 20% by 2004.

The old standard-bearer, auto loans, remained pretty much unchanged, 24% in 2004 vs. 23% in 1994. The other major asset line items, cash, investments, and other assets were very close to their 1994 levels. Hence, the concentration change occurred in real estate loans.

As an industry it is motivating to see where our growth has occurred and how the individual components make up the whole. Analyzing a time series and drawing inferences about the data is one way to generate estimates for a forecast.

 

 

 

April 18, 2005


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