Puerto Rico’s economy has been worse that reported, according to the most widely cited measure of its economic activity.
The Government Development Bank for Puerto Rico released revised economic activity index figures Thursday that showed the index was down 1.6% in February from a year earlier. On a month-to-month basis the index was even with January.
The GDB revised its estimate of the index for fiscal year 2015 and the first half of fiscal 2016 downward. Whereas it had previously reported that the index had fallen an average of 1.6% in fiscal 2015, on Thursday it reported the decline had actually been 1.8%. The GDB also revised the index to show that its average value rather than rising by 0.1%, as it reported earlier, had slipped 1.2% for the first half of fiscal 2016.
The new economic activity index estimates stem from a payroll employment revision released by the U.S. Bureau of Labor Statistics in March. This showed that average Puerto Rico payroll employment in July 2015 to December 2015, rather than advancing by 0.6% compared to the same period a year earlier as the bureau had reported, had dropped 1.2%.
Since payroll employment is one of four measures the GDB uses to calculate the index, the revised employment figures required a revision to the index.
The decline in the bureau’s revised Puerto Rico payroll data stands in contrast to the increase in the bureau’s own household employment data. While the payroll data shows that employment went down 1.7% to February from February 2015 the household employment survey shows that employment went up 1% in the same period.
To explain discrepancies between the two surveys bureau economists have said the payroll data doesn’t include agricultural or self-employment, while the household employment survey does.
The February economic activity index’s decline by 1.6% year-over-year was determined by a 1.1% reduction in payroll employment, 2.6% increase in electric power generation, 1.2% gain in gasoline consumption, and 4.3% decline in cement sales.
In other Puerto Rico news Thursday, Puerto Rico’s Treasury said revenues in March came in near the government’s revised estimates. March’s haul of $935 million in net revenues was $5.3 million less than the revised estimate and $38.6 million less than had been originally budgeted.
Through the first nine months of the fiscal year revenues were running 0.5% below the revised estimate and 2.5% below the original budgeted number. In November 2015 Treasury Secretary Juan Zaragoza G-mez revised projections for the current fiscal year down by 5.2% compared to the approved budget.
Puerto Rico’s government is facing severe liquidity crisis. Puerto Rico Gov. Alejandro García Padilla has said he doesn’t expect the GDB to be able to fully pay a $423 million debt payment due May 1.
