PROVIDENCE – Rhode Island continues to see more favorable business conditions than the national average, although the state’s business environment declined slightly from the second to the third quarter, according to Citizens Bank’s quarterly Business Conditions Index published on Friday.
The bank’s third-quarter business conditions index for Rhode Island of 62.4 represents a 0.16% decrease over the prior quarter, but is still 1.6% higher than a year ago. In comparison, the national index of 61.2 represented a 1.5% quarter-over-quarter increase and a 3% increase over a year ago.
An index greater than 50 indicates expansion and is a reflection of expected improvement in business growth for the next quarter, according to the bank.
“The support from the Fed has been a huge factor,” Tony Bedikian, head of global markets at Citizens, said in a statement. “The capital markets are operating well and we are seeing a lot of effective adjustments made by small and medium-sized companies as the government weighs possible additional stimulus.”
Growth in certain sectors, such as manufacturing, industrial and government, drove quarterly improvements at the national level, although the rising number of COVID-19 cases in some states, including Rhode Island, may pose problems again in the fourth quarter, the company stated.
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.
The proprietary measure of business activity also showed quarter-over-quarter decreases nationwide and in Rhode Island.
Both nationally and in Rhode Island, employment increased, although wage growth ticked down as a result of most job gains coming from lower-wage positions.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
