Puerto Rico’s economic activity drop slowing 8 months after hurricanes hit
SAN JUAN – Puerto Rico’s Economic Development Bank (EDB) published Thursday the Economic Activity Index (EAI) for March, which reflected a 2.6% drop compared with the same month last year.
The EAI is an indicator of general economic activity that when annualized correlates with the island’s real gross national product (GNP) but is not identical. Its methodology is similar to that used in the Conference Board Leading Economic Index for the United States, with data adjusted for seasonality and volatility factors.
Since September, when the island was struck by hurricanes Irma and María, the EAI reflected significant declines when compared year over year.
Compared with February 2018’s EAI of 117.8, the greatest yearly decline in the past five years, the EAI for March 2018 was pegged at 119.3, a 1.2% rise compared to February’s.
In recent months, November saw the most significant drop: 19.7% compared with the previous year. The EAI for November 2017 was 99, while for November 2016, it was 123.2
The four main indicators that make up the EAI are nonfarm payroll employment, cement sales, gas consumption and electric power generation.
Among the indicators that saw declines compared with 2017 was nonfarm payroll employment–a survey of jobs, hours and earnings estimates based on business records, which is provided by the Bureau of Labor Statistics. It averaged 850,400, or 3oo more employees than in February, but reflecting a 4.1% versus March last year.
Likewise, power generation for the month rose to average 1,320.7 million kilowatt-hours, from 1,058.3 million kilowatt-hours in February. The new figure represents an annual decrease of 17.7%. Figures are provided by the Puerto Rico Electric Power Authority and include generation produced by petroleum, natural gas, coal and renewable sources.
Meanwhile, the sale of 94-pound cement bags, the number for which is provided by Cemex Puerto Rico and Argos Puerto Rico, totaled 1.3 million, or about 130,000 more bags than in February. Compared to March last year, 21.4% more bags were sold.
The Transportation Department estimate for gas consumption was 85.2 million gallons, a 6.6% increase over March 2017, but 13.1 million gallons less than the 98.3 million gallons consumed in February this year.
This is the second EAI published by the EDB, and is prepared by economists that were transferred from the Government Development Bank following its closure and now make up the EDB’s new Economic Analysis Office.