Puerto Rico economic activity remains in free fall
SAN JUAN – The Puerto Rico government’s Economic Activity Index (EAI) registered yet another drop, as it reflected a 2.1% decline in June, when compared with the same month last year.
The index stood at 121.1 in June—2.6 points below June 2016—its lowest point in at least a decade. The last time the EAI registered a year-over-year increase dates back to December 2013.
The EAI comprises nonfarm payroll employment, electric-power generation, gasoline consumption and cement sales.
The island’s nonfarm payroll employment in June averaged 875,300, or 1.4% less than the same period in 2016. This figure is published by the Bureau of Labor Statistics and comes from its Establishment Survey, which is based on a revised yearly benchmark.
As for electric power generation, it totaled 1.73 billion kilowatt-hours (kWh) in June, a 4.2% drop when compared with June 2016. Gasoline consumption was 73.2 million gallons, 10.6% less than the same period last year. Finally, cement sales for June totaled 1.05 million bags, a year-over-year increase of 2%.
The Government Development Bank, which prepares the index, says the EAI correlates with Puerto Rico’s real gross national product (GNP) in terms of levels and annual growth rates, but cautions it is “not a direct measurement of real GNP” and its annual growth rate is not the same as the annual growth rate of real GNP. It uses a methodology similar to that used in the Conference Board’s coincident index of the U.S. economy.