PROVIDENCE – While a strong post-pandemic rebound pushed nationwide business conditions to a three-year high in the second quarter, Rhode Island’s business climate worsened, according to Citizens Bank’s Quarterly Business Conditions Index published on Thursday.
The national second-quarter index value of 57.18 represents a 3.2% boost over the prior quarter and a 9.5% increase over a year ago. It’s also the highest quarterly score since the first quarter of 2018, when the index hit 58.23.
“What we see at this stage of the recovery is strong momentum – the payoff of vaccinations, of the ongoing power of fiscal and monetary support, and of the growing readiness to return to normal activities,” Tony Bedikian, head of global markets at Citizens, said in a statement.
The post-pandemic rebound did not translate to similar improvements in Rhode Island, however. The state’s latest index of 50.45 represents a 14.5% decline over the previous quarter and a 5.6% drop from one year prior.
Keith Kelly, the company’s Rhode Island market president, chalked up the state’s relatively unfavorable conditions to its reliance on a still-recovering hospitality industry.
“We’re always a little bit behind,” he said in an interview, alluding to the state’s historic “first in, last out” position from economic recessions. “As a hospitality-oriented economy, it’s taking us a little while to pick up steam.”
Still, Kelly was confident the state would see improvement, particularly as supply chains loosen and people return to work. At a national level, Bedikian also predicted economic growth to continue, though whether early signs of inflation will be short-lived or long-lasting remained a point of concern, according to the release.
Any score above 50 is considered a sign of economic expansion. Eighty percent of the index is based on public data, such as ISM manufacturing and non-manufacturing, 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.
Nationally, manufacturing and nonmanufacturing indices rose in the second quarter, while initial jobless claims dropped, according to Citizens. The company’s proprietary data also showed the strongest growth for utilities and telecommunications companies.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
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