The first quarter of 2020 is a tale of two U.S. economies – one that was solidly grounded in January and another that found itself tipped upside down by the end of March.
While the Q1 2020 Citizens Business Conditions Index™ shows only a slight decline (from 61.0 to 60.8) because the full economic impact of the COVID-19 pandemic emerged late in the quarter, even that modest directional shift from past quarters reflects the gathering storm of the pandemic disruption.
“The U.S. economy was off to a strong start this decade and then the coronavirus spread globally and completely threw everything off track,” said Tony Bedikian, head of Global Markets for Citizens Commercial Banking. “Some sectors are doing better than others. Some have completely ground to a halt. The bull market went into a tailspin, though the government has stepped up to backstop the economy. The changes have been dramatic and more sudden than most of us have experienced in our lifetime.”
The Index is derived from a number of underlying components, most of which declined during the first quarter.
- The Manufacturing Purchasing Managers’ Index (PMI) from the Institute of Supply Management (ISM) was up due to increased certainty over U.S. trade with China and Brexit, but the ISM Non-Manufacturing PMI declined.
- Unemployment increased during the first quarter and wage growth stalled as the pandemic put the brakes on growth in several sectors.
- Proprietary measures of business activity among Citizens Commercial Banking’s more than 7,000 clients across the United States moderated as some sectors were hit harder than others.
The Q2 Index will more fully reflect the economic impacts of the COVID-19 pandemic and early indications signal a significant downward move unless the current situation changes dramatically before quarter end.
The Index draws from public information and proprietary corporate data to establish a unique view of business conditions across the country. An index greater than 50 indicates an expansionary trend and points to improved business growth for the next quarter.
Citizens is a trusted strategic and financial adviser, consistently delivering clear and objective advice. The Citizens Commercial Banking 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 see the Index here or visit the Citizens Commercial Banking website.
About Citizens Financial Group, Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $176.7 billion in assets as of March 31, 2020. 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 24/7 customer contact center and the convenience of approximately 2,800 ATMs and approximately 1,000 branches in 11 states in the New England, Mid-Atlantic and Midwest regions. 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 Twitter, LinkedIn or Facebook.