Citizens Business Conditions index hits highest in US, Vermont lags behind

Vermont Business Magazine Citizens, with branches across Vermont, announced Thursday that the strength of the economic recovery pushed last quarter’s National Citizens Business Conditions Index (CBCI) to 57, its highest level in three years and up five points from last year. A reading above 50 is considered expansionary. Citizens also noted that inflation returned as the economy recovered as the pandemic subsided.

Although the Vermont index is a solid 53.7, it is down from the previous quarter (the highest on record) and from the same period last year. See the data below.

“What we are seeing at this point in the recovery is a strong momentum – the benefit of vaccinations, the continued power of fiscal and monetary support, and the growing willingness to resume normal operations,” said Tony Bedikian, Head of Global Markets at Nationals. “Inflation is worth watching and the verdict is not yet in whether the inflation we have seen is transient or starting to rise. We are closely monitoring supply chain and labor data as well as the impacts of pent-up post-pandemic demand. Barring exogenous factors, the US economy seems poised to continue its steady recovery until the second half of 2021. “

The index is derived from a number of underlying constituents, several of which improved during the second quarter.

  • The Institute for Supply Management (ISM) manufacturing and non-manufacturing indexes both rose for the quarter, helping to boost the citizens’ index.
  • Initial jobless claims fell in another positive sign while new business claims were flat.
  • Utilities and telecommunications companies had a strong overall quarter for businesses, according to the bank’s proprietary data on business activity.

The index draws on public information and proprietary company data to establish a single view of business conditions across the country. An index value greater than 50 indicates expansion and indicates positive business activity for the next quarter.


Growth was the central theme of the quarter. The manufacturing and non-manufacturing sectors posted historically high readings on the Institute of Supply Management (ISM) indexes, well in expansionary territory. Consumer spending continued at a brisk pace, fueled by several rounds of stimulus checks as well as the excess savings that many households accumulated during a year of lockdowns and restrictions.

As GDP growth estimates were revised upward during the period, earnings expectations also tended to increase. Energy companies saw the biggest gain on higher prices for oil and other commodities, but most sectors benefited from a brighter outlook.

Against this background, employment measures were good, but not as strong as expected. Job postings hit record levels in the spring and early summer, and many companies have reported labor shortages. For a variety of reasons – lack of child care, lingering fears of a pandemic, or access to extended employment benefits – the labor pool has remained significantly below its pre-pandemic level. Nonetheless, employment trends were generally positive, contributing to the increase in the CBCI for the quarter.


Another key topic of discussion was inflation readings. The overall CPI (consumer price index), which includes food and energy prices, peaked in the quarter, ending with a year-over-year measure of 5.4 % in June.

Base effects have been one of the driving forces behind the current inflation figures, as the year-over-year comparison to June 2020 opened a window when prices suffered the largest drop amid lockdowns pandemics and job losses.

Fed policymakers have maintained that reopening inflation is most likely a transitional effect, with supply shortages, shipping bottlenecks and demand surges pushing price increases in the near term. . Indeed, vehicle rentals and plane tickets were among the main price increases, clearly motivated by the return of consumers to non-pandemic behavior. Meanwhile, many price components, including home food and shelter, have increased at a much slower pace.

Interest rate markets, known to be a sensitive barometer of the inflation outlook, do not indicate high inflation expectations in future periods, suggesting that investors broadly agree with the point. view of the Fed that current inflation trends will be transient.


Within our proprietary data on business activity, the Midwest again showed the strongest momentum for the quarter. The Mid-Atlantic and Northeast posted lower regional readings, but only by a small margin. All three regions posted positive growth for the period. Likewise, the strength of the sector was widespread. Among our proprietary data on business activities, the utilities and telecommunications sectors showed the highest level of growth, but almost all sectors showed an upward trend from already positive levels in the first quarter. Public sector activity was the only exception, cooling slightly from Q1 levels. However, even public sector data has remained at an expansionary level.


The rebound in the United States is clearly widespread and lasting at this point in the pandemic, with the US economy leading the recovery globally. The main threats to the national growth trajectory include the continued risk of resurgence in infection levels – especially in areas where inoculation rates have been much lower – and the possibility of persistent inflation. In the second quarter, both threats remained sufficiently under control to allow widespread growth in business activity.

For more information on the last quarter index, click here.

The footprint refers to the sphere of influence of citizens.

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $ 185.1 billion in assets as of June 30, 2021. Headquartered in Providence, Rhode Island, Citizens offers a wide range of retail and commercial banking products and services to individuals, small businesses, mid-market businesses, large corporations and institutions. Citizens helps clients reach their potential by listening to them and understanding their needs in order to provide tailored advice, ideas and solutions. In consumer banking, Citizens offers an integrated experience that includes mobile and online banking, a 24/7 customer contact center and the convenience of approximately 3,000 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, credit, savings, wealth management and small business offerings. In commercial banking, Citizens offers a wide range of financial products and solutions, including lending and leasing services, deposit and cash management, currency risk management solutions, interest rates. interest and commodities, as well as loan syndication, corporate finance, mergers and acquisitions, and debt and equity market capabilities. More information is available at or For more information please visit the Citizens website.

Source: PROVIDENCE, RI – Citizens 7.23.2021

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