Wednesday, September 18, 2019

Puerto Rico manufacturing index falls after 13 months above average levels

By on February 1, 2019

SAN JUAN – The Purchasing Managers Index (PMI) for Puerto Rico’s manufacturing sector fell below the threshold level of 50, to 47.3, in December, after 13 consecutive months above it.

A reading below the threshold level suggests a contraction in the sector with respect to the previous month. All of the sub‐indexes decreased in December when compared with the November reading.

The PMI is calculated as the simple average of five sub-indexes, representing different conditions in establishments: New Orders, Production, Employment, Supplier Deliveries and Own Inventories.

For any given month with respect to the previous month, participants are asked to answer whether the business condition of the establishment: improved, remained the same or deteriorated. A value above 50 suggests that the business condition has improved from the previous month.

The PMI has been at or above the threshold level in 63 of the 104 months since the survey was first undertaken. The index is currently available only on a non‐seasonally adjusted (NSA) basis, which means seasonal fluctuations can affect its performance.

The Own Inventories sub‐index edged down to 54.5 in December, but remained at or above the threshold level for a 10th consecutive month.

In December, the New Orders PMI shrank to 47.7, falling below the threshold level of 50. The Production PMI, meanwhile, plummeted to 36.4, falling below the threshold level after two consecutive months above it.

The Employment PMI, inched down to 43.2, remaining below the threshold level for the third consecutive month. Its reading below 50 indicates that manufacturing employment in December was lower than in November.

The Supplier Deliveries PMI decreased to 54.5 in December but remained at or above the threshold of 50 for a fourth consecutive month. In December, the Own Inventories PMI  edged down to 54.5, but remained at or above the threshold for a 10nth consecutive month, indicating that inventories in manufacturing establishments in December were higher than in November.

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