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  • Writer's pictureThe San Juan Daily Star

Manufacturing Index rises 2.7% year-on-year for September

Economic Development and Commerce Secretary Manuel Cidre Miranda

By The Star Staff

An increase of 2.7% when compared to the same month of the previous year was recorded in the September report of the Index of Coincident Indicators in Manufacturing (IICM), Economic Development and Commerce Secretary Manuel Cidre Miranda announced earlier this week.

“This means the 30th consecutive increase in the IICM since April 2021, which represents an increase in that period of 10.2%,” Cidre Miranda said in a written statement.

Industrial activity in September remained unchanged when compared to the previous month, after two consecutive months (July-August) with positive values and two months (May and June) of reductions.

“This value, as well as that of August, represents the highest recorded so far this year and since May 2009,” Cidre Miranda said.

The IICM in September of this year registered a value of 114.4 points (2016=100), in which there were no changes compared to the previous month. The seasonally adjusted components -- for inflation, productivity and technological changes -- that contributed positively to the value of the Index were: payroll paid, hours worked and industrial energy consumption. The components of salaried employment and the indexed trade balance, meanwhile made negative contributions.

The average value of the recently started fiscal year 2024 (July-September) has reflected an increase of 2.5%, when compared to the same period of the previous fiscal year, this being the third consecutive increase in industrial activity during this fiscal period.

Meanwhile, the PRM-PMI value (calculated by the Puerto Rico Institute of Statistics) -- which measures the prospects of company managers and business conditions in the short term, as well as having attributes like those of the IICM -- was 50.0 points, remaining unchanged for the second consecutive month and showing a deceleration trend for the past nine months. However, in the past 33 months, since January 2021, the PMI has registered values above the 50-point threshold in 26 of them, with an average value of 54.5 points, which determines that the sector is expanding (+50).

The manufacturing sector continues to wait for the possible negative effects on global supply chains, in addition to the possible repercussions of the war between Ukraine and Russia and, more recently, between Israel and Hamas. It will depend on the duration of the aforementioned conflicts, since an extension of the war between Israel and Hamas would drive up the prices of hydrocarbons.

The impact of El Niño weather conditions on agricultural production could also push up global food prices.

These geopolitical scenarios and high operational costs will affect the industry in the short or medium term, reflecting a possible slowdown.

The IICM is a composite index that includes a series of coincident indicators that measure the economic state and the short-term fluctuations of economic activity in the industry in synchrony with that economic state. It identifies and analyzes inflection points, serves as a tool for analyzing the impact of business cycles and world events, and for making projections on other indicators that highlight the general state of the economy. The data are seasonally adjusted and those expressed in monetary value are adjusted for prices, in addition to containing adjustments for changes in productivity.

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