All signs point to new drop in GDB-EAI

All signs point to new drop in GDB-EAI

By CB Online Staff
cbnews@caribbeanbusinesspr.comcbprdigital@gmail.com

Evidence continues to mount that Puerto Rico is poised to post a 13-straight monthly contraction in the island economy on a year-over-year basis.

The Puerto Rico economy is gauged through the Government Development Bank’s Economic Activity Index (EAI) which measures: payroll employment, gasoline consumption, power generation and cement sales.

The overdue EAI for December has yet to be released although all four of the metrics have already been published by Puerto Rico or federal government entities.

The latest data to come out was power generation, which was made available by the Puerto Rico Institute of Statistics on Thursday. It showed that net generation fell to 1629.3 million kWh in December 2013 from 1681.1 million kWh during the same month the previous year.

Gasoline consumption figures reported on the GDB website show usage fell to 82.1 million gallons in December 2013, down from 90.1 million gallons during the same month a year ago.

Cement sales and payroll data for December have been in since last month and both reflect declines on aCaribbean Business year-over-year basis.

Cement sales fell to 1.024 million bags in December, down from 1,249 million during the same month in 2012, according to GDB statistics update last month.

The U.S. Labor Department, meanwhile, reported on January 28 that the number of people on nonfarm payrolls in Puerto Rico fell to roughly 904,300 in December, a decrease of 25,000 from the same month last year. GDB numbers updated this week mirror that drop. Puerto Rico’s unemployment rate surged to 15.4 percent in December, more than double the U.S. average of 6.7 percent.

With power production, cement sales, gasoline consumption and payroll jobs all posting decreases, it is unlikely that the December EAI will return to positive terrain.

The GDB’s EAI report for November stressed that economic activity in Puerto Rico has ticked up for three consecutive months after 10 straight contractions. The GDB’s last EAI report was unusual in that it is framed in terms of month-over-month comparisons. All previous monthly reports had been spelled out in year-over-year terms, which is the standard among economists and analysts because it irons out seasonal factors.

The GDB-EAI had returned to growth in December 2011 for the first time since Puerto Rico’s recession began in 2006. It showed small but consistent year-over-year gains for nearly a year before beginning to retreat again in November 2012. Since then, it has been on a steadily steepening decline: falling 0.7 percent in November 2012, 1.3 percent in December 2012, 1.8 percent in January, 3.1 percent in February, 3.1 percent in March, 3.5 percent in April and 3.4 percent in May, 4.5 percent in June, 5 percent in July, 5.4 percent in August, 5.2 percent in September, 5.4 percent in October and now 5.7 percent in November.

The administration of Gov. Alejandro García Padilla has dropped expectations for economic growth this fiscal year. The Planning Board is now projecting that the economy will shrink by 0.8 percent in fiscal 2014, dropping its previous forecast for razor-thin growth of 0.2 percent.

The revision brings the government’s outlook more or less in line with what private economists have been saying for months: the economic slide dating back to 2006 is not over.

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Para trabajar por la Estadidad: https://estado51prusa.com Seminarios-pnp.com https://twitter.com/EstadoPRUSA https://www.facebook.com/EstadoPRUSA/
Para trabajar por la Estadidad: https://estado51prusa.com Seminarios-pnp.com https://twitter.com/EstadoPRUSA https://www.facebook.com/EstadoPRUSA/