PROVIDENCE – The Rhode Island economy continued to contract year over year in March but is sustaining improvement, especially in manufacturing, according to University of Rhode Island economist Leonard Lardaro.
The Current Conditions Index value for Rhode Island increased to 42 from a value of 25 one year prior. A value above 50 indicates expansion, while a value below 50 indicates contraction.
Year over year, five of the 12 indicators that comprise the CCI improved, including retail sales, single-unit permits, new claims, and manufacturing hours and the manufacturing wage. All other indicators worsened over the year.
Despite the continued year over year economic contraction, the state did see improvement month to month. Nine indicators in the index showed signs of improvement from February. The monthly CCI value was 75, indicating a trend toward expansion, Lardaro said.
“The March Current Conditions Index rose all the way to 42, as five of twelve indicators improved relative to last March,” said Lardaro. “This is its highest level since the pandemic began, but its thirteenth consecutive contraction value.”
Lardaro noted that “several indicators had dramatic improvements in March, but this was largely the result of comparing late pandemic values to earlier pandemic values.”
Lardaro said that by the comparison to March 2020 pandemic values, single-unit permits rose 30.5% relative to a year ago. “Better yet, retail sales, our state’s star performing indicator, increased by 52.8%,” he said. “And new claims, a reflection of layoffs, fell by 65.7%.”
“Manufacturing turned in an admirable performance in March, as total manufacturing hours rose by 3.6% and the manufacturing wage rose 7.4%,” he said. “As this shows, Rhode Island’s economy is clearly at a much better place than it was earlier in the pandemic and it is continuing to sustain its forward momentum.”
As for levels of key indicators, Lardaro said, “Make no mistake: These remain well below where they once were and it will take some time for us statistically at least to return to pre-pandemic levels.”
Year over year CCI indicator performance in March:
- Government employment declined 5.4%
- U.S. consumer sentiment declined 4.9%
- Single-unit permits increased 30.5%
- Retail sales increased 52.8%
- Employment services jobs declined 2.1%
- Private service production employment declined 8.5%
- Total manufacturing hours increased 3.6%
- Manufacturing wage increased 7.4%
- Labor force declined 3.7%
- Benefit exhaustions increased 163.1%
- New claims declined 65.7%
- The unemployment rate increased 3.1 percentage points
Lardaro said that where the state goes from here will “largely be determined by spending choices concerning the one billion plus dollars we receive from the federal government. I hope the consumption-investment distinction has taken hold with our elected officials, although I am not terribly confident of that.”
Cassius Shuman is a PBN staff writer. You may reach him at Shuman@PBN.com.
