Economic activity in Puerto Rico declined 0.7% in last month of the year
SAN JUAN – As of December, the Puerto Rico Economic Development Bank’s Economic Activity Index (EDB-EAI) increased 16.1% over the same month in 2017, marking “the fourth year-over-year increment after 69 consecutive months of negative growth,” the bank’s president, Luis Burdiel Agudo, said Thursday.
The marked difference stems from the fact that in December 2017, much of the island’s electrical transmission and distribution lines had been mangled by Hurricane Maria. During that time the index showed a year-over-year drop of 16.5%.
The index reached 119.5 points in December 2018, a 0.7% decline when compared with the previous month. For the July to December period of fiscal year 2019 the growth was of 8.9% with respect to the same period of fiscal 2018. For 2018, the improvement was of 2.6%, while in 2017 there was a 6% drop.
The EDB-EAI correlates to Puerto Rico’s real gross national product and its methodology is similar to that used for the Coincident Economic Index of 10 U.S. indicators published by The Conference Board, an independent nonprofit think tank. It follows a standard procedure to adjust the data for seasonality and volatility factors.
The EDB-EAI is made up of four indicators:
- Total Payroll Employment (Establishment Survey/Thousands of employees). This variable is provided by the U.S. Bureau of Labor Statistics on a monthly basis. The establishment survey provides employment, hours and earnings estimates based on payroll records of business establishments in Puerto Rico.
➢ Total non-farm payroll employment for December 2018 averaged 839,700 employees, a decrease of 1.1% on a month-over-month (m-o-m) basis, an annual increment of 0.8%.
- Total Electric Power Generation (kilowatt-hours [kWh]). This variable is provided by the Puerto Rico Electric Power Authority (Prepa) on a monthly basis. The indicator includes power generation produced by oil, natural gas, coal, solar, two wind farms and landfill gas sources.
➢ Electric power generation in December totaled 1.53 billion kWh, a 0.1% decline on a m-o-m basis, but an interannual increase of 42.5%.
- Cement Sales (millions of 94-pound bags). This variable is provided by CEMEX Puerto Rico & Argos Puerto Rico LLC on a monthly basis. The data are compiled and converted by the EDB.
➢ Cement sales for December totaled 1.2 million bags, a 0.1% increase in a m-o-m basis, and an annual jump of 13.5%.
- Gas Consumption (millions of gallons). This variable is provided by Puerto Rico Highways and Transportation Authority (PRHTA) on a monthly basis. The EDB adjusts the series with a three-month moving average.
➢ The preliminary number for gasoline consumption in December was 76.2 million gallons, 2.6% less than in November 2018, and an 18.9% drop compared with December 2017.