PROVIDENCE – An index of Rhode Island’s leading economic indicators produced by Providence Business News and e-forecasting.com fell in February for the first time since March 2013, dropping four-tenths of a percent to 124.9 from 125.4 in January.
The decline in February followed a slight increase of two-tenths of a percent in January, which was the lowest rate of growth in the index since August 2013, signifying a slowdown in expected economic growth in the state.
The economic indicator index uses nine statistics to forecast the direction of the state’s economy over the next three to six months. Positive numbers signal growth while negative numbers denote contraction.
A reading of 100 on the Providence Business News/e-forecasting.com Leading Economic Indicator Index is equivalent to the state’s activity in 2000. In February 2013, the leading indicator index was 119.5.
Six of the nine components made a negative contribution to Rhode Island’s economy in February, including: unemployment claims, weekly hours in manufacturing, building permits, exports of manufactures, regional consumer expectations and national stock prices.
February marked the first time since May 2013 that weekly hours in manufacturing and regional consumer expectations registered negative contributions on the Leading Economic Indicator Index.
Three of the components made a positive contribution to the index in February, including: the interest rate spread, the national orders index and the state employment barometer. February marked the fifth consecutive month that the state employment barometer registered a positive contribution on the Leading Economic Indicator Index.
In February, Rhode Island’s six-month growth rate – “a signal of turning points” – was 5.5 percent, down from a rate of 7.2 percent in January.
By comparison, the long-term annual growth rate for the index was 1.8 percent, the same as the annual growth rate of the state’s overall economic activity.