Citizens Business Conditions Index™ Jumps in Q2

Corporate revenue rises as markets turn more favorable

The national Citizens Business Conditions Index™ (CBCI) rose to 52.2 in the second quarter, pushing into expansionary territory after taking a step back at the beginning of the year. The reading above 50 indicates that economic momentum is building, in this case due to higher company revenue coupled with the prospect of easing monetary policy, which lowers the cost of capital.

Citizens’ proprietary data showed strong company revenue trends during the period after soft performance across most industries in the first quarter. All other components of the Index remained relatively neutral with the labor market and new business growth showing signs of rebalancing.

“Increasing company revenue drove the Index higher in the second quarter as our clients felt some wind in their sails,” said Eric Merlis, managing director and co-head of global markets at Citizens.

The underlying components of the Index were neutral but provide a solid foundation for growth in the coming months.

• The ISM non-manufacturing component remained in expansionary territory but declined from the first quarter. The ISM manufacturing component was contractionary for the seventh consecutive quarter.

• Employment trends, as measured by initial jobless claims, continued to show resilience and were neutral to the Index.

• New business applications were neutral for the quarter but remain elevated relative to pre-pandemic levels.

• The activity data of Citizens’ Commercial Banking clients showed strong revenue trends after a weak first quarter, serving as the main engine for the Index’s uptick.

Overall, the second quarter CBCI reveals a business environment that has adapted to a sustained period of higher rates.

“The second quarter index reading shows a business environment that is turning the corner with the prospect of easing monetary policy and cheaper capital,” said Merlis. “Concerns about inflation persist but the economy has shown resilience and seems poised for greater expansion.”

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About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $219.9 billion in assets as of June 30, 2024. 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 3,300 ATMs and approximately 1,000 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 X (formerly Twitter), LinkedIn or Facebook.

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