Puerto Rico construction index grows in May despite rising cost pressures
Puerto Rico’s construction sector continued to grow in May, according to the Coincident Index in Construction compiled by economist Ángel Rivera-Montañez.
The index reached a preliminary 125 points, based on 2019=100, a 0.2% increase from April.
After a slow start to the year, the construction industry has now posted two straight months of growth, surpassing expectations, according to the report. Overall, activity continues to expand, though weighed down by high prices, “cuts in public spending and investment, and high interest rates.”
On an annual basis, the index rose 5.8% from May 2024, showing faster growth. For fiscal year 2025 through May, the average value increased 3.4%, compared with a 4.7% rise during the same period a year earlier. For the first five months of calendar 2025, the average was up 5.2%, nearly double the 2.8% growth of early 2024.
At the same time, costs are climbing. The Price Index Deflator in Construction rose 4% year over year in May, the sharpest increase since December 2022.
The new tariffs on construction materials threaten to trigger another wave of price hikes, the report warned.
Rivera-Montañez added that potential reductions in federal reconstruction funds, combined with shifting trade policies, could weaken momentum. “The constant changes in trade policy,” along with the impact of tariffs across the economy, add to uncertainty, he said.
The index is part of Puerto Rico’s broader system of composite indicators, designed to track short-term performance and signal turning points in business activity. While May’s results show resilience, the industry’s outlook remains sensitive to inflation and capital spending levels.
