Home Economy Economic Activity Citizens: Business conditions improve in 4th quarter in R.I., nationally

Citizens: Business conditions improve in 4th quarter in R.I., nationally

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PBN Staff

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01/29/2025

LOWER INTEREST rates and abating election uncertainty helped improve both the state and national business climate in the fourth quarter of 2024, according to Citizens Financial Group Inc.’s Quarterly Business Conditions Index. / COURTESY CITIZENS FINANCIAL GROUP INC.

PROVIDENCE – Supported by lower interest rates and abating election uncertainty, both the state and national business climate improved in the fourth quarter of 2024, according to a new analysis by Citizens Financial Group Inc. published Wednesday. Based on public and proprietary bank data, Rhode Island increased its business index 1.2% year over year to

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PROVIDENCE – Supported by lower interest rates and abating election uncertainty, both the state and national business climate improved in the fourth quarter of 2024, according to a new analysis by Citizens Financial Group Inc. published Wednesday. Based on public and proprietary bank data, Rhode Island increased its business index 1.2% year over year to 51.53, just above the threshold for expansion, according to the Citizens Business Conditions Index. That edged out the national index of 51.0. Although the nationwide fourth-quarter index fell 2% year over year, solid corporate revenue trends and sustained strength in the service sector, which more than offset some headwinds from labor strikes and weather effects in certain areas across the country, bolstered the national reading, Citizens said. “Business conditions continued to improve in the fourth quarter, and the U.S. economy is entering 2025 with some momentum,” said Eric Merlis, managing director and co-head of global markets for Citizens. “While severe weather events may continue to present idiosyncratic headwinds in the near term, overall labor and consumer trends remain healthy and our clients are optimistic about the outlook for business in the year ahead.” The underlying components of the index reflected the modest improvement in business conditions in the fourth quarter, Citizens said, establishing an optimistic starting point for the new year:

Activity data of Citizens’ commercial banking clients showed robust corporate revenue trends across most industries and geographies, driving the uptick in the index.

Strength in the service sector provided an additional boost, as the Institute for Supply Management non-manufacturing component also remained expansionary.

Employment trends, as measured by initial jobless claims, continued to show resilience as the labor market rebalances. They were neutral to the Index.

New business applications also had a neutral impact.

The ISM manufacturing component remained contractionary for the ninth consecutive quarter, though it improved slightly from the third quarter.

“Fed rate cuts helped support a constructive business environment in the fourth quarter, particularly as companies put the uncertainty of the 2024 U.S. election cycle behind them,” Merlis said. “Now, attention turns to the impact of a new presidential administration and the pace of additional monetary easing from here.”