Puerto Rico’s economy in December was 13.3% less active than it had been in August, the last full month before Hurricane Maria.
Puerto Rico’s Government Development Bank released the economic activity index data for September through December Friday. The index values were 121 in August, 115.4 in September, 105. 1 in October, 100.4 in November, and 104.9 in December.
Compared to a year earlier the December index value was down 14%. Compared to November’s value, The December index was up 4.5%.
Outside of a period in 2011 and 2012, the index has generally been going down since the middle of 2005. Excepting this fall, the December index value was last seen in Puerto Rico in early 1987.
The index is based on four measures of economic activity. The meaning of two of the measures may have been compromised by Maria. In the island’s current condition the amount of electricity produced can diverge from the amount consumed. Also many residents are using gasoline-powered generators to generate their own electricity.
Compared to a year earlier, according to the U.S. Bureau of Labor Statistics’ establishment survey, December non-farm payroll employment was down 5.1%, electric power generation was down 37.1%, gasoline consumption was down 25.7%, and cement sales was down 5.1%.
The BLS household employment survey told a more moderate story about Maria’s effect. The seasonally adjusted numbers were unavailable in September. October’s employment number was down 2.1% from August. The employment number grew in November and then in December. The December value was down just 0.4% from August.
BLS Economist Bruce Bergman said he was unsure why the establishment survey showed significantly more decline in employment after the storm than did the household survey.
He noted that there has been a substantial amount of temporary hurricane-related employment after Maria.
Bergman said the data was preliminary and would be adjusted in the annual “benchmarking” process in March.
The two surveys look at different groups of workers, as the establishment survey doesn’t count agricultural and self-employed workers. Bergman said this could partially explain the divergence.
As for what is really happening with Puerto Rico’s economy, Advantage Business Consulting President Vicente Feliciano said that sales tax revenues indicated that since Hurricane Maria the economy was contracting but not plummeting.
As the Puerto Rico’s government is predicting in its fiscal plan, there will be economic growth in fiscal year 2019, which starts July 1, Feliciano said. This is a natural bounce back from a major hurricane’s impact.