Puerto Rico’s Economic Activity Index shows Y-o-Y increase of 7.9% in May
Puerto Rico’s Economic Activity Index (EDB-EAI) for May 2021 reached a maximum level of 119.4 points representing a year-over-year increase of 7.9%. When compared to the previous month, the index rose by 0.2%, Luis Alemañy, president of the Puerto Rico Economic Development Bank, which produces the report, confirmed.
The EDB-EAI contracted 5% in 2020, reaching 116.6 points. In 2019 it averaged 122.8 and grew by 1.6%, the agency revealed.
This is the third increase after 12 year-over-year consecutive decreases, due to the COVID-19 pandemic. To reach pre-pandemic levels, the economic activity will require a consistent multi-sector recovery pace, the EDB stated.
“However, the average of the index for the period from January to May 2021 was 119.2 points or an increase of 1.2%,” he said, noting that if the government continues to execute his economic development plan, “the report will reflect the positive impact of these measures, as can be seen in the year-over-year growth that the indicator presents from March to date.”
Puerto Rico’s EDB-EAI is composed of four indicators: Total non-farm payroll employment; electric power generation; cement sales; and gasoline sales.
During May 2021, two of the four components, cement sales and electricity generation, increased by 8.4% and 1.8%, respectively, while total non-farm payroll employment decreased by 0.3% and gasoline consumption fell 0.2%. These results were compared to the April 2021 figures.
When compared against May 2020, the four index components of the increased: payroll employment by 10%; cement sales by 12.1%; gasoline consumption by 3.7%; and electric power generation by 2.6%.
The interannual results reflect the effects of the closure caused by the COVID-19 pandemic on the island, according to the report.
The EDB-EAI is an indicator of general economic activity, not a direct measurement of Puerto Rico’s real GNP. The EDB-EAI’s annual growth rate is not the same as the annual growth rate of the island’s real GNP. The EDB-EAI does not include all the economic sectors that comprise the GNP.
The latest EDB-EAI analysis period includes the months during which the island experienced the consequences of a 6.4 magnitude earthquake, followed by strong aftershocks, coupled with the social and economic repercussions that the COVID-19 pandemic has caused both locally and internationally.
The Index is reviewed annually, during the first quarter of each calendar year, and all report results are obtained using seasonally adjusted data, the EDB explained.