How Businesses Can Take Advantage of Deposit And Loans Data — Texas
Consumer purchase behavior varies from state to state. Depending on consumer behavior there will be a rise of businesses to suffice the needs. Capital growth in the state will also influence the purchase behavior of the consumer. Availability of capital will depend on Loans issued, savings deposits, tax rates in the state & federal, private contracts from the government, foreign investments, regulation, business growth, and future growth perspective.
When there is an increase in the number of loans there tends to be increased consumer spending activity in the short term as the loan disperses through the marketplace. The orientation of the consumer towards the present or future products will depend on the volume of loans issued vs increase in deposit accounts in the banks.
Expansion of loans showcase the creation of capital glut. Businesses can take advantage of the increased availability of capital by sending more products to the marketplace and absorbing the capital to their balance sheets as revenue. Most businesses will benefit when they know when to expand or when there will be increased or when to target audience. Best time to target customers is when they have the capital.
State — Texas
Commercial And Industrial Loans
Commercial & Industrial Loans had a slight expansion of $672 million dollars in the first quarter of 2019. Immediate benefactors are raw material providers, transportation companies, infrastructure providers and all their employers. Any expansion of industrial loans leads to increase in consumer spending activity in the short term.
Credit Card Loans
Credit card Loans show spending activity. The decline in spending suggests consumers are holding off purchase activity. Interest rates on credit cards have been expanding this year. Credit card interest rates in commercial banks went up to 15%. As the Federal reserve bank starts up the easing cycle we would see more expansion to the credit card debt. Fed reduced the Interest rates by 0.25 basis points on July 31. With the current level of debt, it would need more rate cuts to stir the demand. Credit card debt declined by nearly $958 million dollars in the first quarter of 2019.
Other Loans Revolving Around Credit Card
Other similar forms of credit also suffered a contraction of $34 million dollars in the first quarter of 2019.
Automobile Loans
Automobile Loans had a small expansion of $35 million in the first quarter of 2019. We are not trying to predict how the loans are going to expand but use it as a metric to gauge human actions in the marketplace. If there is expansion of loans then it signifies there will be an increase in consumer spending as the money moves into the hands of the consumer. Businesses can utilize the condition by delivering convenience and products in line with consumer preference.
Real Estate Loans
Real Estate Loans expanded by $4 billion dollars in the first quarter of 2019 in Texas. Expansion of loans shows the immediate benefactors of the new money would be construction companies, transportation company, infrastructure providers, retailers, raw material suppliers and all their employees.
Commercial Real Estate Loans
Commercial Real-estate loans also expanded by over 3.4 billion dollars suggesting business activities and corporate office expansion. Commercial Real estate has seen falling interest rates and there are reduced foreign investments due to trade concerns. Commercial real estate would need more stimulus in the form of rate cuts to stir up the market. 0.25 basis point Interest rate cut delivered by the Fed wouldn’t be enough to prop up demand. Although the Fed has indicated further rate cuts.
Deposit Account
Savings Deposits
Savings deposits represent short term mindset of the consumer and they potentially expect immediate spending. Money market deposits expanded by over $5 billion dollars in the first quarter of 2019. It shows business expansion and employment growth.
Other savings deposits expanded by over 1.2 billion dollars in the first quarter of 2019. The increase in savings deposits come from loans issued, investments from companies, foreign investments, private contracts from the government, and expansion of businesses in Texas in other states.
Time Deposits
Time deposits with less than 100k expanded by 1.2 billion dollars in the first quarter of 2019. Time deposits with a capital 100k to 250k expanded by 1 billion dollars. Time deposits with more than 250 k expanded by 912 million dollars. Expansion of small-cap time deposits suggests these are activities of people who park their money to potentially use it the near or far future. Higher denominated expansion of time deposits shows business expansion and cash reserves improvement from the companies.
Small Time Deposits Less Than a Year Maturity
Small-time deposits represent the mindset of the consumer who is waiting out to find the best deal or one who has short term needs like a family event or business expense or home renovation or vehicular purchase etc. In the near term, this capital will be available to the consumer. It’s also a signal to the businesses that these consumers will have additional capital in the upcoming month and they will buy products if it brings value to them. A business decision like production increase or staffing expansion or new store/office opening can be based on capital availability that can be used as a business opportunity by the companies. Small-time deposits with less than year maturity represent near term buyers of products they can be targeted to improve the sale. Either they are shopping for best deals or waiting for certain events to use the capital for, the availability of capital shows that there is a business opportunity.
Small Time Deposit of less than 250k with maturity time less than 3 months expanded by $1.2 billion dollars in the first quarter of 2019.
Time deposits of less than 250k with maturity time between 3 and 12 months expanded by 176 million in the first quarter of 2019.
Time deposits with more than 250k having maturity time of 3 months declined by 305 million dollars in the first quarter.
Time deposit of more than 250k having a maturity period of 3 to 12 months expanded by over 577 million dollars in the first quarter of 2019.
Of all the small-time deposit, deposits with less 250k and maturity time of 3 months expanded the most in the first quarter signifying the fact that consumers will be buying more in the near term as these deposits mature and move into their demand deposit or savings accounts. These deposits are a good gauge of metric for production expansion, staffing expansion, estimation of future revenue & customer growth and opening up of new stores/offices.
Demand Deposits
Demand deposits declined by 1.5 Billion dollars in the first quarter of 2019. It shows more spending was made in the first quarter of 2019 both from businesses and individuals. It can also represent an increase in employment. Spending activity shows that current products are being purchased so businesses can take advantage of the expanded spending activity.
Business Strategy To Take Advantage Of Capital Buildups And Credit Availability
- Most of the Credit expansion came from commercial real estate loan sector. Credit expansion leads to near term consumer spending if they are saving money in time deposits.
- A considerable volume of expansion in the smaller time deposit denominations with a maturity period of 3 months. It shows businesses can use capital availability as a gauge to measure future demand and also attract the audience as the capital becomes available.
- Savings deposits also increased considerably showcasing business expansion and employment growth. There is capital buildup that companies can use a metric to acquire new customers.
