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04/26/2023
Citizen’s Business Conditions Index™ returns in Q1
Respondents are concerned about a decline in income, but they see the increase.
The labor market remained strong despite a sharp hike by the Federal Reserve aimed at slowing the economy to curb inflation. Consumer Services and Healthcare were among the top sectors to grow as industries were able to pass on growing spending to customers in the first quarter, according to Citizen Proprietary Data. The manufacturing sector has slowed down as high borrowing costs have impacted expansion by limiting capital expenditures.
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Relief from inflation
Major components of the index showed volatile changes in the business environment. Three of the five classes raised the index, one was neutral and one weighed reading.
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Data on ownership activity of Citizens Commercial Bank customers, a key component of the index, was strongest across regions, suggesting that conditions in middle market and medium corporate businesses remained positive.
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As consumers spent more on services and companies in these sectors were able to pass on any additional costs, the non-manufacturing sector of ISM grew.
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New business applications have been added, helping to boost the index.
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The trend in employment, measured as part of the index of initial jobless claims, was flat in the quarter, but overall job gains were surprisingly high despite a number of notable corporate layoff announcements nationwide.
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The ISM manufacturing index declined as the sector is more vulnerable to rising interest rates.
The mix of trends included a quarter in which demand for goods was weak, while demand for services was steady amid broad employment stability.
The first quarter CBCI showed a business environment that continues to adapt to the Fed’s annual rate hike campaign. The strong labor market continues to have a stabilizing effect as business conditions seek a new post-tightening normal.
“The first quarter showed CBCI’s business environment moderated as interest rate hikes worked to curb inflation,” Merlis said. “The still strong labor market continued to be a source of support during the quarter.”
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About Citizens Financial Group, Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions.
Check out the source version at businesswire.com: https://www.businesswire.com/news/home/20230426005243/am/
Frank Quaratiello
617.543.5810
frank.quaratiello@citizensbank.com
Source: Citizens Financial Group, Inc.
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