PROVIDENCE – Rhode Island’s economy expanded for the 12th consecutive month in March, but the future strength of the state’s economy is a concern, University of Rhode Island economist and professor Leonard Lardaro said on Tuesday.
The Rhode Island Current Conditions Index he produces each month had a value of 75 in March, same as it was in January and February. It marks a continued expansion, but a step down from the final three months of 2021 when the value sat at 92.
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A CCI value above 50 indicates expansion, while a value below 50 indicates contraction.
Nine of 12 indicators that comprise the index improved year over year, led by manufacturing and private-services production employment gains. But Lardaro said many of this month’s advancing indicators displayed very healthy growth rates – without the assistance of favorable “base effects,” or weak levels from a year ago.
“For March, only two of the five leading indicators contained in the CCI improved, but both [government employment and retail sales] managed to exceed difficult comps. Even the ongoing weakness in the Monthly CCI eased a bit, as it moved into expansion territory for the first time in months,” Lardaro said. “In the coming months, Rhode Island will continue to move closer to what is our normal, or longer-term performance.”
The March Monthly CCI rose from 50 in February to expansion range, 67, for the first time in a while. Laradro said The nonperforming indicators largely coincided with those of the regular CCI and we should expect to see the Monthly CCI fluctuate often throughout this year.
“As we continue to move beyond the pandemic, we will see a more accurate picture of our economy’s true momentum that will quite possibly be hindered by national weakness, removing some or much of our post-pandemic gains,” Lardaro said.
Lardaro also worries the state’s economy will weaken next year.
“I suspect that this state’s lack of effort in reinventing its business climate will prove to be costly and problematic when all the federal funds are gone along with their multiplier effects,” Lardaro said.
Year-over-year CCI indicator performance in March:
- Government employment increased 1.8%.
- U.S. consumer sentiment declined 30%.
- Single-unit permits declined 21%.
- Retail sales rose 1%.
- Employment services jobs decreased 10.3%.
- Private services production employment rose 3.5%.
- Total manufacturing hours increased 11.1%.
- The state’s manufacturing wage rose 13%.
- The state labor force grew 0%.
- Benefit exhaustions declined 70.9%.
- New claims declined 88.7%.
- The state’s unemployment rate declined 2.6 percentage points.
