The Economic Activity Index reflects a weak economy

February 28, 2019

The Economic Development Bank (EDB)  Puerto Rico issued in December of 2018 a report on the Puerto Rico Economic Activity Index (EAI). The EAI is a good indicator of the economic activity of the island since it presents a strong positive correlation with Puerto Rico’s Real Gross National Product. Additionally, it is composed of four indicators: (1) Total Payroll Employment, (2) Total Electric Power Generation, (3) Cement Sales, and (4) Gas Consumption.

 

In the report, the EDB writes that the EAI reached a 16.1% of growth in December of 2018 whenever compared to that same date one year ago (December 2017). This present a 0.7% decrease whenever compared to November of 2018.  During the fiscal year 2019 (July-December) the growth was of 8.9% when compared to fiscal year 2018.

 

 

 

 

 

In 2018, calendar year, the average point indicator was of 119.8 and the percentage change (when compared to 2017) was of 2.6. In order to contextualize this data, it is important to understand that in 2017, calendar year, the average point indicator was of 116.8 and the percentage change (when compared to 2016) was of -6.0.

 

Similarly, in 2016, calendar year, the average point indicator was of 124.3 and the percentage change (when compared to 2015) was of -1.6. From 2013 up until 2017 the percentage change between years remained in negative numbers, yet we theorize that the reason why 2018’s percentage change obtained a positive number is because the average point indicator of 2017 was historically too low.

 

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