PROVIDENCE – An index of Rhode Island’s leading economic indicators rose 0.4 percent in May to 126.8 from 126.3 in April, the second consecutive month of gains in the state’s economic indicator index produced by Providence Business News and e-forecasting.com.
In April, the leading indicator index increased 0.2 percent month over month.
The index uses nine statistics to forecast the direction of the state’s economy over the next three to six months. Positive numbers signal growth while negative numbers denote contraction.
A reading of 100 on the Providence Business News/e-forecasting.com Leading Economic Indicator Index is equivalent to the state’s activity in 2000. In May 2013, the leading indicator index was 120.3.
Five of the nine components made a positive contribution to Rhode Island’s economy in May, including building permits, exports of manufactures, national stock prices, the interest rate spread and the national orders index.
Two components – weekly hours in manufacturing and the state employment barometer – made a negative contribution to the index, while unemployment claims and consumer expectations made no significant contribution. May represented the second consecutive month that the state employment barometer registered a negative contribution on the Leading Economic Indicator Index.
In May, Rhode Island’s six-month growth rate – “a signal of turning points” – was 4.3 percent, down slightly from a rate of 4.4 percent a month earlier in April.
By comparison, the long-term annual growth rate for the index was 1.9 percent, the same as the annual growth rate of the state’s overall economic activity.