Economic Activity Index holds positive trend for 13 consecutive months in March
The Puerto Rico Economic Development Bank’s Economic Activity Index (EDB-EAI) has shown 13 consecutive months of growth, with the index registering 125.4 points in March, a result whose level had not been reached since 2016, EDB President Luis Alemañy said.
With just one quarter remaining in Fiscal 2022 — which for the government runs from July 2021 to June 2022 — the cumulative growth rate from July to March increased by 5%.
The results in March represent a month-on-month increase of 0.4%. If compared to the same month of the previous year, the growth rate of the IAE-BDE was 3.9%. This latest rise would mark the 13th consecutive increase after 13 months of year-on-year drops.
If the trend continues, 2022 would mark the first annual growth since 2019, after the EDB-EAI closed on negative ground during Fiscal 2020 and 2021, with -2.2% and -0.8%, respectively.
“The positive rebound in employment, cement sales that remain above one million bags per month, stability in the levels of electricity generation and gasoline consumption that, at least until March 2022, does not present transcendental negative impacts due to the increase in the price of a barrel of oil, have contributed to the improvement that we observe in the island’s economic activity,” said Alemañy.
However, he warned that the current price of electricity and the inflationary pressures in Puerto Rico, the U.S. mainland and Europe — besides the geopolitical tensions that are being caused by the conflict between Russia and Ukraine and the resurgence of COVID-19 in China — presents the possibility, in the short and medium term, of supply chain disruptions in the production and distribution of goods and services.
The EDB-EAI is a coincident index that summarizes the general behavior of Puerto Rico’s economic activity.
The EDB-EAI average for 2020 was 116.6, which shows a decrease of 5.1% compared to 2019, after two consecutive annual growths of 3.8% in 2018 and 1.6% in 2019. However, the index expanded 4.7% in 2021, reaching 122.1 points. In turn, the EDB-EAI average for fiscal year 2021 ended at 118.9, which translates into a drop of 0.8% versus fiscal year 2020 (119.9, or -2.2%), the EDB confirmed.
In cumulative terms, the EDB-EAI average for the first nine months of fiscal year 2022 (July-March) is 124.0, or an increase of 5% when compared to the same period of fiscal year 2021. In turn, the first quarter of 2022 (January-March) presents a growth of 4%.
During March 2022, two of the four EDB-EAI components — cement sales and electricity generation — increased 6.2% and 2.8%, respectively. Meanwhile, non-agricultural salaried employment fell -0.4% and gasoline consumption -0.3%. These results were compared against the figures for February 2022.
“When compared to the same month of the previous year (March 2021), only cement sales fell (-9.3%), while the remaining components increased: non-agricultural salaried employment (5.6%), gasoline consumption (6.7%) and electricity generation (0.5%),” Alemañy said.
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