PROVIDENCE – An index of leading economic indicators for Rhode Island rose for the fourth consecutive month in August, boosting hopes that the state may finally be pulling out of a long recession after more than two years.
The Providence Business News/e-forecasting.com index increased 1.7 percent in August to 98.0 after a revised 0.9 percent increase in July. A reading of 100 is equal to the state’s economic activity in 2000.
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Maria E. Simos, president and CEO of Durham, N.H.-based e-forecasting.com, said the string of positive readings means Rhode Island’s economic outlook is “continuing to look very good.” It takes three consecutive months of increases to signal a sustained upward trend.
The leading indicators index uses nine published statistics to forecast the direction of the state’s economy over the next three to six months, with positive numbers signaling growth and negative numbers signaling contraction.
Rhode Island’s economy has been in recession since June 2007, according to e-forecasting’s estimates.
Seven factors were responsible for the index’s August increase – month-over-month rises in new building permits; stock prices; manufacturing exports; the economic outlook for Canada; and the national technology index; and month-over-month declines in claims for unemployment benefits and interest rate spreads.
Those were partly offset by declines in weekly manufacturing hours and consumer expectations.
In addition, the index’s six-month growth rate forecast continued to show signs of improvement in August. It projected the state economy contracting by 3.8 percent on an annual basis over the next six months, down from July and June’s projected contractions of 8.7 percent and 12.8 percent, respectively. The growth gauge sank to a record 22.3 percent contraction forecast in March.
