Puerto Rico manufacturing index edged up in December
The Puerto Rico Manufacturing-Purchasing Managers Index (PRM-PMI) increased slightly month-over-month, to 56.3 in December, with a rise in the employment and supplier deliveries sub-indexes. A reading above the threshold level of 50 suggests an expansion in the manufacturing sector with respect to the previous month.
The index – which is available only on a non-seasonally adjusted basis (NSA), thus seasonal fluctuations can affect performance – measures short-term conditions in the island’s manufacturing sector and is produced as part of a project between the Puerto Rico Manufacturers Association and the Puerto Rico Statistics Institute. The metric is calculated as the simple average of five sub-indexes representing different conditions in establishments: New Orders, Production, Employment, Supplier Deliveries and Own Inventories.
Survey participants include manufacturing establishments with 50 or more employees with membership in the Manufacturers Association. Participants are asked to answer whether the business condition of the establishment improved, remained the same or deteriorated with respect to the previous month. The survey also includes questions on other business conditions.
All PMI sub-indexes were at or above the threshold level of 50 in December. According to the report, the Supplier Deliveries PMI (NSA) rose to 57.9, staying above the threshold for two consecutive months; however, “the speed of supplier deliveries in December was lower than in November.”
Regarding the New Orders PMI (NSA), at 52.6, the sub-index remained at or above the threshold for six consecutive months, while the Production PMI (NSA) stayed at 52.6, or above the threshold for three consecutive months.
As for the Employment PMI (NSA), it increased to 57.9, staying at or above the threshold for three consecutive months. However, the Own Inventories PMI (NSA) decreased to 60.5, but stayed above the threshold for three consecutive months.
The Statistics Institute said that in a supplemental survey of manufacturing establishments, “the biggest challenges faced by companies during the past month were: in operations (shortage of raw material 20%, lead times 13%, costs 13%, supply chain logistics 13%, holiday disruptions 13%, maintenance and repair of machinery and equipment 7%), human resources (employment 40%, absenteeism 13%, Covid 13%) and utilities (energy costs 13%, unreliable utilities 7%).”
The institute also pointed out that the PMI has been at or above the threshold level in 93 of the 151 months since the survey was first undertaken.
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