Puerto Rico's Economic Index Down 5% in Last 12 Months

Puerto Rico's Economic Activity Index for July, released Aug. 30, showed continued weakness, with the index down 5% year-over-year. The 5% decline was worse than June's performance, which showed a 4.6% decline, according to the Government Development Bank of Puerto Rico.

The Economic Activity Index has four components: gasoline consumption, non-farm payroll employment, electric power generation and cement bag sales. In July gasoline consumption was down 1.3% from a year earlier.

Non-farm payroll employment was down 3.7%. This employment level is now the lowest it has been since at least 2009.

Electric power generation declined 4.1% from the level of July 2012. July 2013 was cooler than July 2012, at least in Puerto Rico's capital San Juan, and this may partly explain why electricity consumption decreased.

Finally, sales of bags of cement fell 14.3% from the previous July. In late July acting GDB president José Pagán told The Bond Buyer, "Cement sales increased by 7.3% during FY2011 (13%) and FY 2012 (18%), which is mainly associated to the election cycle…. After the election cycle, public construction investment retakes a more 'normal' pattern, which helps to explain reductions observed immediately after September 2012."

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