Citizens’ Business Conditions Index Shows Slowdown in Economic Momentum in Q1/24

The Citizens Business Conditions Index (CBCI) fell to 48.2 in Q1/24 as business activity normalized from elevated levels in recent quarters. The reading below 50 indicates that economic momentum slowed during the first quarter against a backdrop of moderately restrictive monetary policy.

Labor markets and consumer trends remained resilient in the first quarter, according to the index; however, Citizens’ proprietary data showed softening revenue trends during the period after solid performance across most industries in the second half of 2023. New business applications also fell compared to the fourth quarter, though they remain well above pre-pandemic levels.

“While the index shows business conditions dipping in the first quarter, the overall U.S. economy remains fairly healthy,” Eric Merlis, managing director and co-head of global markets at Citizens, said.

The underlying components of the index reflected mixed dynamics in the business environment. One of the five components provided a boost to the index, while one was neutral and three weighed on the reading.

  • The ISM non-manufacturing component was expansionary, as demand for services continued to be strong, boosting the index.
  • Employment trends, as measured by initial jobless claims, remained resilient and were neutral to the index.
  • New business applications declined, weighing on the index, but remain elevated relative to pre-pandemic levels.
  • The activity data of Citizens’ commercial banking clients also showed softening revenue trends after a strong fourth quarter.
  • The ISM manufacturing component was contractionary for the sixth consecutive quarter. However, monthly data indicates some green shoots in the manufacturing outlook. The index component turned positive in March for the first time since September 2022.

“The first quarter index reading shows a business environment that is slowing as higher interest rates weigh on economic conditions,” Merlis said. “While concerns about inflation persist, the data provides evidence that tighter monetary policy is having its intended effect.”

Like this story? Begin each business day with news you need to know! Click here to register now for our FREE Daily E-News Broadcast and start YOUR day informed!

Leave a comment

View Latest Digital Edition

Terry Mulreany
Subscriptions: 800 708 9373 x130
[email protected]
Susie Angelucci
Advertising: 484.459.3016
[email protected]

View Latest Digital Edition

Visit our sister website for news, information, exclusive articles,
deal tables and more on the asset-based lending, factoring,
and restructuring industries.