Home Economy Economic Activity Citizens Financial: Business conditions cooling in R.I.

Citizens Financial: Business conditions cooling in R.I.

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PBN Staff

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04/29/2025

citizens — BUSINESS CONDITIONS in Rhode Island showed signs of cooling in the first quarter of 2025 despite a positive start to the year nationally, according to Citizens Financial Group Inc. / PBN FILE PHOTO

PROVIDENCE – Business conditions in Rhode Island showed signs of cooling in the first quarter of 2025 despite a positive start to the fiscal year nationally, according to Citizens Financial Group Inc. The financial services company on Tuesday reported that Rhode Island’s Citizens Business Conditions Index fell 1.2% year over year and 5.3% quarter over

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PROVIDENCE – Business conditions in Rhode Island showed signs of cooling in the first quarter of 2025 despite a positive start to the fiscal year nationally, according to Citizens Financial Group Inc. The financial services company on Tuesday reported that Rhode Island’s Citizens Business Conditions Index fell 1.2% year over year and 5.3% quarter over quarter to 48.8, lagging the national index of 50.9. Citizens attributed the cooling momentum in Rhode Island due to outsized affects from federal government restructuring and also business and consumer sentiment softening amid elevated macroeconomic and geopolitical uncertainty. Nationally, solid corporate revenue trends were the main driver of the positive momentum. Citizens said. Proprietary data showed continued revenue growth across most industries and geographies, with the energy and utilities sectors standing out as notable exceptions. “Business leaders entered 2025 optimistic about the year ahead,” said Eric Merlis, managing director and co-head of global markets for Citizens. “That initial optimism helped buoy the economy in the first quarter, but the forward outlook from here is more uncertain.” However, Citizens did add the first quarter business conditions index revealed a resilient business environment that is starting to feel the impacts of softening business and consumer sentiment as macroeconomic and geopolitical uncertainty persist. While the ultimate outcome remains to be seen, the second quarter index is likely to more fully reflect the economic impacts of evolving federal policies, including ongoing tariff negotiations. “Overall, our clients continued to perform well in the first quarter despite elevated market volatility and macroeconomic uncertainty,” added Merlis. “As the operating environment evolves, we are working closely with them to provide thoughtful advice and help them to navigate through challenges.” Macroeconomic factors were generally neutral to the index on a national level, but signs pointed to slowing momentum as the quarter wore on.

New business applications had a neutral impact, suggesting some cautiousness.

National employment data, as measured by initial jobless claims, was also neutral. However, some states, such as Delaware, experienced outsized impacts from federal government restructuring.

Similarly, the ISM [Institute for Supply Management index] Manufacturing and ISM Services indexes were both expansionary for the quarter, but sentiment cooled noticeably in March as macroeconomic uncertainty grew.