Vaccine Optimism Boosts 4Q20 Citizens Business Conditions Index™

Rhea-AI Summary

The Citizens Business Conditions Index™ rose to 61.4 in Q4 2020, up from 61.2 in Q3, indicating ongoing economic recovery amid COVID-19 vaccine optimism. Key sectors like financial and energy showed strength, while manufacturing remained robust. Despite a weak December jobs report, overall employment increased. The manufacturing index improved significantly, showcasing resilience in the economy. The report suggests a healthy corporate deal-making environment driven by anticipated tax policy changes.

Positive

• Citizens Business Conditions Index rose to 61.4 in Q4 2020, signaling economic expansion.
• Strength in financial and energy sectors noted, contributing to overall growth.
• Manufacturing sector showed significant improvement, bolstering economic confidence.
• Overall employment increased during Q4 2020.

Negative

• December jobs report was disappointing, indicating potential labor market weaknesses.
• Proprietary measures of business activity decreased slightly among Citizens’ clients.

The national Citizens Business Conditions Index™ posted a second consecutive quarter of gains as optimism fueled by COVID-19 vaccine announcements and increased election certainty began to outweigh concerns about spiking pandemic cases.

The Index rose modestly to 61.4 in the final quarter of 2020, up from 61.2 at the end of the third quarter, showing a continuing rebound after the impact of the COVID-19 pandemic put downward pressure on the index earlier in 2020.

Some sectors continued to fare better than others, with this quarter’s report showing strength in the financial and energy sectors.

“The fourth quarter was a real turning point. With the vaccine news and a clear outcome for the presidential election, we saw a lot more confidence about the future among business leaders,” said Tony Bedikian, head of global markets at Citizens. “The manufacturing sector has been strong and the overall economy has shown resiliency since the middle of the second quarter last year.”

“The first quarter of 2021 has already seen major news events in Washington, D.C. and retail trading volatility shaking Wall Street,” added Bedikian. “As our M&A Outlook also recently noted, we are seeing a healthy environment for corporate deal-making spurred by the vaccine rollout and anticipated tax policy changes.”

The Index is derived from a number of underlying components, many of which improved during the fourth quarter.

• The Institute for Supply Management (ISM) Manufacturing Index rose sharply for the quarter, helping to buoy the Citizens Index, while the Non-Manufacturing Index dipped.
• Employment increased overall during the fourth quarter despite a disappointing jobs report for December. Wage growth was flat.
• Proprietary measures of business activity in the fourth quarter among Citizens’ more than 7,000 clients across the United States were down slightly.

The Index draws from public information and proprietary corporate data to establish a unique view of business conditions across the country. An index value greater than 50 indicates expansion and points to positive business activity for the next quarter.

Citizens is a trusted strategic and financial adviser, consistently delivering clear and objective advice. The Citizens 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 website.

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $183.3 billion in assets as of December 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 2,700 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210205005053/en/

FAQ

What is the Citizens Business Conditions Index for Q4 2020?

The Citizens Business Conditions Index rose to 61.4 in Q4 2020, indicating economic expansion.

How did the financial and energy sectors perform in Q4 2020?

The financial and energy sectors demonstrated strength and contributed positively to the Citizens Business Conditions Index.

What was the impact of the December jobs report on Citizens Financial Group?

The December jobs report was disappointing, despite an overall increase in employment during Q4 2020.

Is there optimism regarding corporate deal-making following the Q4 2020 report?

Yes, a healthy environment for corporate deal-making is noted, spurred by vaccine rollout and anticipated tax policy changes.