Puerto Rico Economic Activity Index continues to reflect marked decline after hurricanes
SAN JUAN – Puerto Rico’s Economic Development Bank (EDB) published Tuesday the Economic Activity Index (EAI) for February, which reflected a 4.2% drop compared with the same month last year.
The EAI is an indicator of general economic activity that when annualized correlates with the island’s real gross national product (GNP) but is not identical. Its methodology is similar to that used in the Conference Board Leading Economic Index for the United States, with data adjusted for seasonality and volatility factors.
Compared with February 2018’s EAI of 117.8, in February 2017, it had reached 123, thus the 4.2% difference represents the greatest yearly decline in the past five years. In February 2014, the index registered a 3.6% decrease compared with the same month the previous year.
It should be noted that since September, when the island was struck by hurricanes Irma and María, all EAIs have registered marked decreases when compared year over year.
In recent months, November saw the most significant drop: 19.7% compared with the previous year. The EAI for November 2017 was 99, while for November 2016, it was 123.2
The four main indicators that make up the EAI are nonfarm payroll employment, cement sales, gas consumption and electric power generation.
Among the indicators that saw declines compared with 2017 was payroll employment–a survey of jobs, hours and earnings estimates based on business records, which is provided by the Bureau of Labor Statistics. It averaged 845,100 employees, reflecting an annual decrease of 4.1%.
Likewise, power generation for the month averaged 1,058.3 million kilowatt-hours, which represents an annual decrease of 27.3%. Figures are provided by the Puerto Rico Electric Power Authority and include generation produced by petroleum, natural gas, coal and renewable sources.
Meanwhile, the sale of 94-pound cement bags, the number for which is provided by Cemex Puerto Rico and Argos Puerto Rico, totaled 1.17 million bags, an increase of 13.1% compared with February last year.
Meanwhile, the Transportation Department estimate for gas consumption was 98.3 million gallons, registering a significant 27% increase over February 2017.
This is the first EAI published by the EDB, and is prepared by economists that were transferred from the Government Development Bank following its closure and now make up the EDB’s new Economic Analysis Office.