The national Citizens Business Conditions Index (CBCI) moderated to 50.04 in Q3/24 but remained in expansionary territory. The second consecutive reading above 50 indicates that business conditions continue to be solid.
Citizens’ proprietary data showed a continuation of positive company revenue trends across most industries and geographies in Q3/24. Consumer trends also remained resilient against the backdrop of a strong labor market. These factors more than offset some idiosyncratic macro challenges during the period, including the impact of severe weather events and overall cautiousness in the business environment ahead of the upcoming U.S. election.
“Overall business conditions are strong and Citizens’ middle market and mid-corporate clients continue to perform well,” Eric Merlis, managing director and co-head of global markets at Citizens, said. “As we approach the conclusion of election season, we are working closely with our clients to help them navigate the uncertainty and prepare for potential market and business implications.”
- The underlying components of the index reflected a mixed, but relatively steady, operating backdrop.
- The ISM non-manufacturing component remained expansionary, reflecting continued consumer resilience.
- The activity data of Citizens’ commercial banking clients showed a continuation of solid revenue trends, providing an additional boost to the index.
- Employment trends, as measured by initial jobless claims, continue to be healthy but were neutral to the index.
- New business applications also had a neutral impact for the quarter, reflecting some cautiousness around new business investment ahead of the U.S. election.
- The ISM manufacturing component was contractionary for the eighth consecutive quarter.
- Overall, Q3/24 CBCI reveals a steady business environment that appears to have found balance.
“The third quarter index reading shows a business environment that has reached equilibrium,” Merlis said. “Easing monetary policy should continue to support constructive business conditions, particularly as uncertainty in the U.S. political and regulatory environment likely abates in the coming quarters.”
