Economic activity index rises a 7th straight time; up 2.7% from a year ago
By The Star Staff
Economic Development Bank for Puerto Rico (BDE by its Spanish initials) President Luis Alemañy González, through the Center for Economic Studies, published earlier this week the data related to the Economic Activity Index (IAE) for September 2021, which reached a maximum level of 120.3 points, a figure that represents a year-on-year increase of 2.7 percent.
“This is the seventh year-on-year increase after 12 consecutive decreases,” Alemañy González said. “Compared to the previous month, the IAE-BDE growth rate rose 0.7%. The interannual results reflect the effects of the closure caused by the pandemic on the island.”
The BDE president acknowledged that “although there is an upward trend in the index, economic activity requires that such improvement maintain a consistent and multisectoral positive rhythm.”
“It is also important to bear in mind that, although COVID-19 infections are beginning to be contained, the recovery has been uneven due to the fact that supply chains do not flow normally due to the outbreaks that persist in various regions of the world, due to the disparity in the management of preventive measures and inequity in access to vaccines,” he said. “On the other hand, the impact of the lack of labor and raw materials at the international level is greatly perceived, which also affects the manufacture of goods and imports. Likewise, the recovery in the economy continues to be restricted within those segments of the population that continue to be susceptible to the virus and its mutations.”
Alemañy emphasized that congestion in transshipment ports in the United States, difficulties in recruiting personnel, insufficient materials for manufacturing, increases in energy costs and lack of warehouse space are some of the elements impacting the supply chain. The current inflationary pressures also represent a challenge for the island’s economic recovery.
The official also noted that the employment sectors most affected by the measures that were implemented to control the coronavirus -- services in recreation and accommodation, education and health, among others -- still have a way to go to reach the levels they presented prior to the pandemic.
He pointed out that worker losses in those sectors must be absorbed by other industries, or they could be inserted into the start-ups of new businesses.
In any case, non-agricultural salaried employment showed an improvement in September, both monthly and year-on-year. Investment in infrastructure, support for trade driven by federal aid, the verve that the manufacturing sector has achieved -- bringing the production of medicines and medical equipment to areas closer to the United States -- and the gradual reintegration into the workforce of people left unemployed by COVID-19, in turn, should positively impact employment on the island.
Cement sales continue to be above one million 94-pound bags per month, gasoline consumption has been climbing as face-to-face work is once again the norm, and electricity generation remains stable, Alemañy González noted.
The IAE-BDE contracted 5.0% in 2020, to reach 116.6 points. In 2019 it averaged 122.8 and grew 1.6%. In turn, the IAE-BDE average for fiscal year 2021 ended at 117.9, which translates into a decrease of 1.7% versus fiscal year 2020 (120.0 or -1.9%). However, the average of the index for the period (January-September) was 119.3 points, or an increase of 2.7%. Similarly, the index rose to 119.7, or 3.7%, during the first quarter of fiscal 2022 (July-September). Comparisons were made against the same months last year.
During September 2021, two of the four components of the IAE-BDE -- non-agricultural salaried employment and cement sales -- increased by 0.01% and 0.8%, respectively, while gasoline consumption fell 0.1% and electrical power generation was reduced by 2.2%. These results were compared to the August 2021 figures.