Monday, July 15, 2019

Puerto Rico Economic Activity Index rose in January, February

By on April 10, 2019

Represent 7th, 8th consecutive increases after 67 months of drops

SAN JUAN – The Economic Development Bank for Puerto Rico (EDB) published Tuesday its most recent Economic Activity Index (EAI) results for the island: 121.3 in January and 121 in February 2019, both months above the threshold of 100, indicating expansion.

The index “is highly correlated to Puerto Rico’s real GNP [gross national product] in both level and annual growth rates,” according to the EDB, which cautions that these are not identical.

Year-over-year, the EAI increase in January of 7% compared with the same month last year. Likewise, the index registered a 3% increase in February when compared with 2018. The results represent the seventh and eighth consecutive increases after 67 successive months of declines.

Also, this result reflects an increase of 0.2% for January and a decrease of 0.2% in February compared with the previous months.

The results were delayed because the EAI is reviewed annually, during the first quarter of each calendar year.

For the 2018 calendar year, the EAI reached an average level of 119.9 points. This figure represents a 3.2% increase when compared with 2017. In addition, the accumulated EAI average for the July to February period of fiscal year 2019 was 121.4, which reflects growth of 8.5% compared with the result for the same period of fiscal 2018.

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. Department of Labor and Human Resources’ Bureau of Labor Statistics (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 kilowatt-hours, or kWh). This variable is provided monthly by the Puerto Rico Power Authority (Prepa). The indicator includes electric power produced by petroleum, natural gas, coal and renewable energy sources, the latter is supplied by utility-scale solar facilities, 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 monthly. 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 on a monthly basis. The EDB adjusts the series with a three-month moving average.

In February, non-farm salaried employment averaged 875,000 employees, an increase of 0.2% over January and an annual increase of 2.5%. Cement sales for the same period totaled 1.1 million bags, representing a month-over-month decrease of 3.2% and an annual decline of 4.7%.

The preliminary estimate for gasoline consumption in February was 77.1 million gallons, or 1.7% lower than the previous month, as well as a 18.4% drop compared with the same month in 2018. Electric power generation reached 1.52 billion kWh in February, a 1% increase over January and 24% more than in February 2018.

The index’s methodology includes adjusting the data for seasonality and volatility factors, and is similar to that used by the Conference Board, a nonprofit business research organization that publishes economic indicators for the United States and several other countries.

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