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Puerto Rico gov’t: Indicators show Puerto Rico’s economic growth

Puerto Rico’s economy has shown key economic indicators that are in line with a growing economy and with billions of dollars allocated for the island’s reconstruction, Economic Development Bank (EDB) President Luis Alemañy- González said.

He further noted that despite the influence of international challenges in production, such as the conflicts between Israel and Hamas and Russia and Ukraine, natural disasters disrupting supply chains, and the maintenance of more restrictive monetary policies to control inflation, which coincide with local factors that began in 2006, local economic indicators show that the island’s economy is growing.

“We’re pleased to report that the latest economic results reflect significant growth in all key indicators,” Alemañy-González said. “These positive numbers are a testament to the strong performance of our economy, supported by effective policies and the resilience of our financial system. We will continue to work diligently to maintain this positive trend and ensure a robust economic future for all.”

Gladys Medina, an economist at the EDB’s Center for Economic Studies, stated that these positive numbers demonstrate fertile ground and sustainable economic growth that incorporates nine sectors, including employment, construction, manufacturing, trade, inflation rate, auto sales, gasoline consumption, electricity generation, and the economic activity index.

“We continue to see positive signs for the island’s economy and economic development, as all these indicators demonstrate,” Medina said.

Regarding the employment sector, an establishment survey used to measure non-agricultural wage employment, highlights that from January to November 2023, it reached an average of 947,200 jobs or a growth of 3.2% (29,000 jobs) compared to the same period last year.

Meanwhile, at the end of the first half of 2023, 5,624 private establishments were created on the island, with a total of 50,792 establishments counted, contributing 734,332 jobs and a total payroll of $11,713 million. Ninety five percent of the total establishments, or 48,278, are small or medium-sized businesses with fewer than 50 employees in the first quarter of 2023, contributing to 43% of jobs in the private sector. In addition, self-employment reached 196,000 jobs in November 2023, the same as the previous year.

As to the construction sector, it continues to show improvement in its results. According to the establishment survey, employment in the construction and mining sector increased by 10.9% during 2022, with an increase of 3,200 jobs, reaching an average of 33,000 jobs. Similarly, the data for the period from January to November 2023 is 36,600 jobs, an increase of 11.6% (3,800 jobs).

“The trend in construction employment contrasts in part with the movement of cement sales, even though they have consistently remained above one million 94-pound sacks sold per month. It is expected that 2023 will surpass the total sales recorded in 2022 when they declined by 6.8%, reaching a level of 14.5 million sacks sold,” Alemañy-González explained.

Manufacturing employment, meanwhile, continues its upward trajectory for the third consecutive year, and during the period from January to November 2023, it recorded an increase of 2.0%, totaling 83,600 wage jobs.

Furthermore, the trade sector also continues to show growth. During 2022, employment in commerce increased by 2.4% (3,800 jobs) to reach a total of 162,600 jobs. The period from January to November 2023 ended with 164,400 jobs, representing a 1.5% growth. In the same period of 2023, there was a slight increase of 0.3%, or 100 more jobs.

The employment figures align with data on retail sales for the period from January to October 2023. In that regard, retail sales increased nominally during the period from January to October 2023, by 3.6%, reaching a total of $31,871 million, compared to the same period of the previous year, while the total sales for 2022 amounted to $37,655 million (2.4% year-on-year growth).

Another important indicator is the sales of new cars and trucks. During the period from January to November 2023, these sales increased by 4.0% compared to 2022, reaching a figure of 116,993 units.

Meanwhile, gasoline consumption has remained stable, with 71.2 million gallons recorded in November. In cumulative terms, the period from January to November 2023 totaled 827.1 million gallons, an increase of 7.4% compared to the same period the previous year.

In addition, it was projected that the Economic Activity Index (EAI) of the Puerto Rico Economic Development Bank closed 2023 with growth for the third consecutive year.

For the first 11 months of 2023 (January – November), the average EAI was 127.5, translating to a growth of 3.3% compared to the same period of the previous year. Meanwhile, the average for the period from July to November of fiscal year 2024 was 128.9, representing a growth of 5.1% when compared to the same period of the previous year.

In November 2023, all four components of the EIA: non-agricultural wage employment, cement sales, gasoline consumption, and electricity generation, grew by 2.6%, 6.4%, 5.1%, and 5.3%, respectively, compared to November 2022.

COSSEC highlights cooperative sector strength in 2023
Meanwhile, the government’s Public Corporation for the Supervision and Insurance of Cooperatives (COSSEC, in Spanish) confirmed that the island’s cooperative sector remained strong in 2023.

“It has been a good year for our sector,” COSSEC Executive President Mabel Jiménez-Miranda said. “We have achieved significant accomplishments, and collectively, the cooperative system has achieved solid financial stability. Its ability to withstand economic challenges, its focus on member participation, and prudent management have undoubtedly solidified its position as a resilient and sustainable model.”

In this context, one of the major achievements was the approval of dividends for insured credit unions totaling $2.65 million, after an eight-year absence.

The number of members increased to 1,141,154, an increase of 22,292 compared to the same date in 2022 and 103,338 active members in 2019. This, when compared to the 113 cooperatives operating in 2019, shows a decrease of 15 cooperatives. However, there was a substantial increase in the number of members, representing a 10.01% increase compared to 2019.

Jiménez-Miranda stressed that despite significant economic challenges, it was important to develop collaboration strategies with a new focus that has allowed and maintained the strong growth of the industry.

“We see it in the number of members; more people continue to choose savings and credit cooperatives as their primary financial institution, and as of June 30, 2023, the cooperative system in Puerto Rico has 98 cooperatives,” the COSSEC president added.

Furthermore, among the achievements highlighted in 2023 was the signing of a collaborative agreement with INCLUSIV, representing a significant event for the public corporation, establishing a structure to facilitate low-cost public and private capital investments and promote the participation of savings and credit cooperatives in federal community development programs.

Similarly, focusing on collaborative efforts to work together for the benefit of all cooperatives, they achieved the signing of a memorandum of understanding (MOU) with the National Credit Union Administration (NCUA).

“This agreement represents a significant milestone,” Jiménez-Miranda added. “I have seen firsthand how the cooperative system in Puerto Rico changes lives by promoting financial inclusion and opportunities. The NCUA-COSSEC relationship will strengthen agency supervision, cooperative oversight, and lead us to a stronger and more dynamic system to benefit all Puerto Ricans.”

She concluded saying that: “Cooperatives have been fundamental in the economic development of Puerto Rico and have demonstrated their ability to achieve consistent growth. These achievements are the result of teamwork, responsible management, and strategies focused on the well-being of the entire cooperative component, and I am sure that we will close with never seen before numbers.”

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This story was written by our staff based on a press release.

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