November economic activity drops slightly in Puerto Rico
SAN JUAN – The Economic Development Bank for Puerto Rico (BDE) published the Economic Activity Index (EAI) for November 2018, which reached a level of 120.3, a 0.1% drop when compared with October 2018.
When examined against November 2017, the EAI increased 21.5%, the third consecutive increase after 69 consecutive months of year-on-year reductions. The year-on-year change from November 2017 to November 2018 was 41.3 points, which represents a change from -19.7% to + 21.5%.
The annual comparison is with respect to November 2017, when the island’s electrical grid remained down in the aftermath of Hurricane María.
The accumulated average of the EAI for the first 11 months of 2018 registered a level of 119.9, a percentage increase of 1.5% versus the same period in 2017. In addition, the EAI average from July to November was 121.7, a 7.6% increase compared with the same period the year before.
The EDB-EAI is made up of four indicators:
–Total Payroll Employment (Establishment Survey/ Thousands of employees). This variable is provided by the Bureau of Labor Statistics of the U.S. Department of Labor and Human Resources (BLS) on a monthly basis. The establishment survey provides employment, hours, and earnings estimates based on payroll records of business establishments in Puerto Rico.
–Total Electric Power Generation (Millions of kWh). This variable is provided by the Puerto Rico Power Authority (Prepa) on a monthly basis. This indicator includes the electric power generation produced by petroleum, natural gas, coal and renewable energy sources. The renewable energy is supplied by utility-scale solar photovoltaic generating capacity, two wind farms and landfill gas sources.
–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.
–Gas Consumption (Millions of gallons). This variable is provided by the Puerto Rico Highways and Transportation Authority (PRHTA) on a monthly basis. The EDB adjusts the series with a three-month moving average.
Cement sales, electric power generation and nonfarm payroll employment were the index components that reflected a year-on-year rise in November.
Average nonfarm payroll employment was of 849,600 employees, a 0.07% increase over October, or of 0.9% when compared with November 2017. Cement sales for the same period totaled 1.2 million 94-pound bags, which represents an increase of 6.3% over the previous month, or 64.3% higher than in November 2017.
The preliminary estimate for gasoline consumption this past November was 78.1 million gallons, 2.8% less than in October. The figure also represents a 6.7% decline when compared with November 2017.
About 1.53 billion kilowatt-hours (kWh) was produced in November, an increase of 3.3% compared with the month before, but 94.7% more than in November 2017.
The EAI is an indicator of economic activity that does not represent a direct measure of the real gross national product (GNP), despite its high correlation with real GNP. The indicator was formulated using a methodology similar to that by the “Conference Board” in its coincident index for the U.S. economy.