Home Economy Economic Activity Citizens: Business climate shows end-of-year improvement

Citizens: Business climate shows end-of-year improvement

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PBN Staff

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01/31/2024

citizens — THE STATE and national business climate improved in the fourth quarter of 2023, according to Citizens Financial Group Inc.’s Quarterly Business Conditions Index. /PBN FILE PHOTO

PROVIDENCE – Supported by continued resilience in the labor market and consumer trends, the state and national business climate improved in the fourth quarter of 2023, according to Citizens Financial Group Inc.’s Quarterly Business Conditions Index. Rhode Island increased its index value 2% year over year to 50.86, just above the threshold for expansion. The

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PROVIDENCE - Supported by continued resilience in the labor market and consumer trends, the state and national business climate improved in the fourth quarter of 2023, according to Citizens Financial Group Inc.’s Quarterly Business Conditions Index. Rhode Island increased its index value 2% year over year to 50.86, just above the threshold for expansion. The nationwide fourth-quarter index value of 51.81 marked a 2.2% increase over the prior quarter, and a 2.7% gain from the fourth quarter of 2022, Citizens said on Wednesday. Eighty percent of the index is based on public data, such as ISM manufacturing and nonmanufacturing, unemployment and wage-growth numbers. Twenty percent of the index is based on metrics related to the business activity of the bank’s commercial clients. The year-over-year increases reflected strong proprietary data on client revenue across most industries, especially in the health care and consumer industries, while the basic materials and energy sectors faced headwinds, according to Citizens. “The U.S. economy is entering 2024 on solid footing as the labor market has remained resilient and inflation has showed signs of normalizing,” said Eric Merlis, managing director and co-head of global markets at Citizens. “Moving forward, all eyes will be on the Fed and the timing and pace of rate cuts in the year ahead. We are working closely with our clients to help them navigate these changing circumstances and take advantage of them.” Still, many of the measurements used to calculate the index value show moderate improvements quarter over quarter, including solid employment trends, as measured by initial jobless claims. The ISM manufacturing index also remained expansionary, as consumers continued to spend on travel and recreational services. “The fourth quarter CBCI shows a business environment that continued to improve despite ongoing challenges in the macro environment during the period,” said Merlis. “Citizens’ middle market and midcorporate clients have remained resilient and, as we head into 2024, the tailwinds continue to be stronger than the headwinds.”