KINGSTON – Although the pace of Rhode Island’s economic tailspin slowed during the final month of the first quarter, the state’s economy still had not hit bottom in March, according to University of Rhode Island economist Leonard Lardaro’s monthly index of economic conditions.

Lardaro’s Current Conditions Index, which measures 12 economic indicators, registered its lowest possible rating – zero – in March, meaning not a single one of the dozen indicators improved over a year ago. It was only the fourth time the index has hit zero since Lardaro began calculating it in 1980, the other three being in June, August and October of last year.

Nevertheless, Lardaro said he saw some cause for optimism in the numbers, because seven of the 12 indicators did see an improvement in March compared with the previous month. In addition, six of the 12 indicators also showed a month-over-month improvement in February, when the overall index scored an eight.

“Our economy is now declining more slowly, but has yet to hit a bottom in terms of the level of activity,” Lardaro said. For example, he said, the unemployment rate held steady at 10.5 percent in March, the same rate as in February – but that was still far higher than in March 2008, when the unemployment rate was 6.8 percent, which helps explain why the overall index registered a zero.

Lardaro also saw good news in the pickup in the number of single-unit housing permits, which jumped from an annual rate of 297 permits in February to 518 in March. National consumer sentiment improved and employment service jobs declined only slightly, both of which are leading indicators of an economic recovery, Lardaro said.

However, Lardaro added: “Let’s not forget that while we are seeing some encouraging signs … our state’s economy continues to perform very badly relative to a year ago.” Public and private sector employment fell in March, manufacturing hours plunged, manufacturing wages declined and retail sales dropped, he noted.

Benefit exhaustions, which measure long-term employment, also rose to 59.1 percent in March, while the number of claims soared by 131.9 percent.

“The process of recovery begins when we start to consistently match or exceed each prior month’s economic performance, as this sets the stage for eventual improvement on a year-over-year basis,” Lardaro said. “Based on February and March, I believe Rhode Island has begun this process.”

“Let’s keep our fingers crossed, anyway,” he added.

The Current Conditions Index, created by University of Rhode Island economist Leonard Lardaro, measures the strength of the state’s economic climate. The index – based on 12 key economic indicators related to housing, retail sales, the employment situation and the labor supply – attained its maximum value of 100 points several times in 1984 and 1986. Additional information, including historical data back through 1980, is available at members.cox.net/lardaro/current.