Planning Board updates economic model with 2017 Input-Output Matrix
New data shows service sector growth and a drop in manufacturing in Puerto Rico.
The Puerto Rico Planning Board has published its latest Input-Output Matrix (IOM), a key analytical tool used to assess the island’s economic structure and the interrelationships between industries.
Released April 29, the matrix provides government agencies, researchers and private-sector investors with data to evaluate the potential impacts of policy decisions, investment planning and industrial changes.
“The Input-Output Matrix is an indispensable tool for calculating economic impact,” said Planning Board President Héctor Morales-Martínez. He noted that the 2017 matrix is among the “most up to date in the Western Hemisphere,” and that the agency is working with the University of Puerto Rico at Mayagüez to produce an updated matrix with a 2022 base year.
“It is an important tool for local industries and businesses for their planning and investments, and for those seeking to relocate their operations in the face of changes in the U.S. government’s economic policies, and who see investing in Puerto Rico as a real option,” he added.
The IOM outlines how goods and services flow across sectors during production and is used to model employment, income and output multipliers. The 2017 matrix is based on 109 industry categories aligned with the North American Industry Classification System (NAICS), using data from the Department of the Treasury, manufacturing surveys and the Economic Census.
According to the data, the manufacturing sector accounted for 39% of total production in 2017 — an 8 percentage point decline from 2012. Meanwhile, the services sector grew to 54%, up from 43% in the previous matrix. Agriculture remained at 1%, while government production fell to 5%, a 2-point decrease. The construction and mining sector showed a 2% decline in 2017.
The matrix also tracks added value, or the net output of a sector after subtracting intermediate inputs, which includes income and profit contributions. Total added value in 2017 reached 47.9%, a modest 1.2% increase from 2012. Pharmaceutical manufacturing, real estate and the central government were the largest contributors. In pharmaceuticals and real estate, 90% of added value came from profit, while the government’s contribution came entirely from wages and supplements.
The matrix also tracks added value, or the net output of a sector after subtracting intermediate inputs, which includes income and profit contributions.
Personal consumption patterns shifted toward services, which accounted for 64% of spending in 2017, up from 54%. Manufacturing dropped to 35%, a 10-point decline. Within the services category, the commerce sector made up 58% of consumption.
Planning Board officials confirmed that development of a new matrix using 2022 as the base year is underway in coordination with the university.
