While EAI keeps showing steady growth, another index paints different picture
By The Star Staff
While Puerto Rico’s Economic Activity Index grew by 0.3% in December when compared to November and has maintained steady growth for the past 10 months, a separate economic measuring tool, the Purchasing Managers Index, which measures the activity in the manufacturing sector, shows a decrease.
Economic Development Bank (EDB) President Luis Alemañy González announced on Tuesday that the EDB Economic Activity Index for Puerto Rico maintained a growth trajectory for 10 consecutive months and closed 2021 with an increase close to three percent.
“The trend of its components explains the positive results, distinguishing values in total cement sales comparable to those recorded between 2013 and 2014, and electricity generation, which in turn closed this past year with levels that have not been had since 2016,” Alemañy González said in a written statement.
The EDB president said the recovery of the employment sector and the main reconstruction projects that are on the agenda for 2022 are expected to boost economic activity. He noted that the public should not lose sight of the challenges that could extend into or even arise this year, which is why it is important for economic activity to maintain a positive, stable and multisectoral rhythm, adaptable to a new world reality.
The Economic Activity Index registered 122.5 points in December 2021, representing a year-on-year growth of 3.8 percent. It was also the 10th consecutive increase after 12 continuous reductions and the highest level reached since January 2020. Compared to the previous month, the index growth rate rose 0.3 percent. The interannual results compare with periods with various containment measures in force in response to the evolution of the pandemic on the island.
The Purchasing Managers Index (PMI) for Puerto Rico’s manufacturing sector presented a different picture. On a non-seasonally adjusted (NSA) basis, the PMI for Puerto Rico’s manufacturing sector decreased to 47.6 in December 2021. A reading below the threshold level of 50 suggests a contraction in the manufacturing sector with respect to the previous month.
All the sub-indexes decreased with respect to the previous month. On a positive note, the New Orders and Supplier Deliveries sub-indexes were above the threshold level of 50. In a supplemental survey of manufacturing establishments related to the COVID-19 pandemic, manufacturers said they endured a reduction in suppliers’ deliveries (48.3%), a reduction in staff (48.3%), a reduction in inventory (41.4%), and others (10.3%).
In contrast, 10% of the respondents weren’t affected by the pandemic.
Among the biggest challenges faced by companies during the past month were in the human resources area (employment, recruitment, absenteeism and a spike in COVID cases), a lack of raw material, and delays in the supply chain including transportation and supplies deliveries, logistics and increased costs. The Puerto Rico Manufacturing PMI has been at or above the threshold level in 83 of the 140 months since the survey was first undertaken.