Puerto Rico Economic Activity Index continues to drop
SAN JUAN – The Fiscal Agency and Financial Advisory Authority (AAFAF by its Spanish acronym) and the Government Development Bank (GDB) published Friday its Economic Activity Index (EIA) for August, which reflects a 1.9 % drop when compared with the same month last year.
The latest numbers have August ending with an EIA of 121, while for the same month last year, the indicator was at 123.4. The last time the index saw an uptick compared with the prior year was in December 2013.
The four main indicators that make up the EAI are the total non-farm payroll employment, cement sales, gasoline consumption and electric power generation.
Total non-farm payroll employment for August averaged 868,000, a 1.2% decrease compared with August 2016. The preliminary estimate of gasoline consumption for August was 81.3 million gallons, for an annual decrease of 2.9%.
Electric power generation for August averaged 1,862.7 million kilowatt-hours (kWh), an annual reduction of 1.1%. The indicator includes petroleum, natural gas, coal and renewable energy sources supplied by utility-scale solar photovoltaic generating capacity, two wind farms and landfill gases sources.
Bucking the downward trend, however, cement sales for August totaled 1.02 million bags, an annual increase of 0.5%.
The EAI summarizes the current trend and the most recent behavior of the economy. It is highly correlated to Puerto Rico’s real gross national product (GNP) in both, levels and annual growth rates. The index’s methodology is similar to that used in the Conference Board’s coincident index of the U.S. economy and follows a standard procedure to adjust data for seasonality and volatility factors, according to the GDB.
The indicator, however, is not a direct measurement of real GNP. The annual growth rate of the EAI is not the same as the annual growth rate of real GNP, AAFAF explains.