PROVIDENCE – Shots in arms and money in bank accounts translated to better business conditions in Rhode Island in the first quarter of 2021, according to Citizens Bank’s Quarterly Business Condition Index published on Friday.
Rhode Island’s first-quarter index value of 57.05 represents a 5.7% boost over the prior quarter. It’s also an 18.9% year-over-year increase.
“Rhode Island continues to push forward on the economic front,” said Keith Kelly, Rhode Island president, Citizens. “As vaccinations increase and the weather gets warmer, many businesses that have been hit hardest by the pandemic are able to move ahead with more certainty. The pandemic has put our business clients to the test and they have shown incredible resilience across the state.”
Nationally, the latest index value of 53.29, a decline of 4.8% over the prior quarter, though still at a “healthy reading” with anything above 50 considered expansionary, the company stated. Year over year, the national index rose by 3.4%.
Better-than-expected vaccination rates and financial support through federal stimulus checks and unemployment benefits were named as reasons for the improved outlook nationally, helping consumers and boosting business activity in manufacturing and service sectors, according to the company’s indicators.
The company has also for the first time this quarter replaced wage growth and employment with new business applications and initial jobless claims as part of its calculations to “increase timeliness” and take into account variation between months of the quarter.
United States initial jobless claims showed “periods of weakness” but improved toward the quarter’s end, while new business applications were flat.
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.
Both manufacturing and nonmanufacturing indexes rose for the quarter, though health care companies boasted the strongest quarterly performance, the company stated.
Citizens’ proprietary data also showed strong performances in telecommunications, government and consumer goods businesses.
Updated to include comment from Keith Kelly.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
