Citizens Business Conditions Index™ Bounces Back in Q1
April 26 2023 - 9:01AM
Business Wire
Respondents seeing revenue increases broadly
despite possible recession risk
Citizens announced today that its national Citizens Business
Conditions Index™ (CBCI) rose to 53.9 in the first quarter,
reflecting continued strength in the labor market, more new
business openings and positive corporate revenue trends. The Index
had dipped below 50 during the fourth quarter of last year and the
bounce-back during the first quarter signaled a return to positive
business conditions.
The labor market has remained resilient despite aggressive
Federal Reserve rate hikes aimed at slowing the economy to curb
inflation. Citizens’ proprietary data on client revenue grew across
industries during the first quarter with Consumer Services and
Healthcare among the top sectors due to their ability to pass on
rising costs to customers. The manufacturing sector slowed as
higher borrowing costs impacted expansion by limiting capital
expenditures.
“The U.S. economy bounced back during the first quarter and,
despite the disruption in the financial sector, there are several
positive signs going forward such as improving inflation measures
and still-strong labor numbers,” said Eric Merlis, managing
director and co-head of global markets, Citizens. “Policy-makers
are still trying to thread the needle amid heightened recession
concern, but companies that have made it through the pandemic and
recent headwinds continue to prove their resiliency.”
Relief from Inflation Surprises
The underlying components of the Index showed improving dynamics
in the business environment. Three of five components boosted the
Index level while one was neutral and one weighed on the
reading.
- The proprietary activity data of Citizens’ commercial banking
clients, a key component of the Index, was very strong across
regions, suggesting that the conditions at middle-market and
mid-corporate businesses remained positive.
- The ISM non-manufacturing component grew as consumers spent
more on services and companies in these sectors were more able to
pass on any increased costs.
- New business applications increased, helping to boost the
Index.
- Employment trends, which are measured by initial jobless claims
as an Index component, were flat for the quarter, but nationally
the number of jobs gained overall was surprisingly high despite
much-publicized corporate layoff announcements.
- The ISM manufacturing index decreased as the sector is more
sensitive to rising interest rates.
The mix of trends captures a quarter where demand for goods was
lower while demand for services was steady amid broader employment
stability.
The first-quarter CBCI revealed a business environment that
continues to adapt to the year-long rate hike campaign from the
Fed. The strong labor market continues to have a stabilizing effect
as business conditions search for a new post-tightening normal.
“The first-quarter CBCI showed a business environment where
activity has adjusted as interest-rate hikes seem to be working to
curb inflation,” said Merlis. “The still-strong job market
continued to be a source of support during the quarter.”
Citizens is a trusted strategic and financial adviser,
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approach puts clients first by offering great ideas combined with
thorough market knowledge and excellent execution, to help our
clients enhance their business and reach their potential. For more
information, please visit the Citizens website.
About Citizens Financial Group,
Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and
largest financial institutions, with $222.3 billion in assets as of
March 31, 2023. Headquartered in Providence, Rhode Island, Citizens
offers a broad range of retail and commercial banking products and
services to individuals, small businesses, middle-market companies,
large corporations and institutions. Citizens helps its customers
reach their potential by listening to them and by understanding
their needs in order to offer tailored advice, ideas and solutions.
In Consumer Banking, Citizens provides an integrated experience
that includes mobile and online banking, a full-service customer
contact center and the convenience of approximately 3,400 ATMs and
more than 1,100 branches in 14 states and the District of Columbia.
Consumer Banking products and services include a full range of
banking, lending, savings, wealth management and small business
offerings. In Commercial Banking, Citizens offers a broad
complement of financial products and solutions, including lending
and leasing, deposit and treasury management services, foreign
exchange, interest rate and commodity risk management solutions, as
well as loan syndication, corporate finance, merger and
acquisition, and debt and equity capital markets capabilities. More
information is available at www.citizensbank.com or visit us on
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Frank Quaratiello 617.543.5810
frank.quaratiello@citizensbank.com
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