For the month of June 2021, the economic activity index for Puerto Rico stood at 118.9. Compared to the previous month, the index went down by 0.5 points, or 0.4%. When compared to the index for June 2020, the index increased by 8.8, or 8%. A useful comparison both for the index, as well as for its subcomponents, is with the average for the second half of 2019. The index’s average for the last 6 months of 2019 was 123.4. Compared to that, the index for the month of June is down 4.5, or 3.7%.
The first of the index’s subcomponents, non-farm payroll, reached a total of 850.9 thousand jobs for the month of June. Compared to the previous month, there was an increase of 1.2, or 0.1%. When compared with the previous year, there was an increase of 54.9, or 6.9%. When compared to the 2019 average, it is still down by 31.8, or 3.6%. Job recovery was relatively fast during the second half of 2020 but has since slowed down. Some sectors of the economy, such as manufacturing and construction, have actually surpassed their pre-pandemic total. Yet, others, such as tourism and education, have lagged behind. As expanded unemployment benefits end in the month of September, we can expect jobs to continue increasing. The assignment of several billion in additional federal funds that will be disbursed by the end of the year give reason for optimism regarding employment.
The second of the index’s subcomponents, energy generation, reached a total of 1,511 mm kWh in June. Compared to the previous month, there was a decrease of 104.9 mm kWh, or 6.5%. Compared to the previous year, there was a decrease of 89.6 mm kWh, or 5.6%. Compared to the 2019 average, there is a decrease of 5.2%.
The third of the index’s subcomponents, gasoline consumption, reached a total of 67.6 million gallons in June. Compared to the previous month, consumption increased by 0.6, or 0.9%. Compared to June 2020, consumption increased by 6.3 million gallons, or 10.3%. Compared to the 2019 average, consumption is down by 9.1 million gallons, or 11.8%. Increasing gas prices due to anticipation of increased demand as economic activity increases at a global scale have led to this component lagging behind its pre-pandemic total.
The last of the index’s subcomponents, cement sales, reached a total of 1,199.9 thousand 94lb. bags in June. Compared to the previous month, there was a decrease of 14.8%. Compared to the previous year, there was a decrease of 18.8%. Compared to the 2019 average, cement sales were 6.7% higher. Out of all the subcomponents used here, cement sales were the least affected. They remain above the 2019 average but have begun to decrease relative to the elevated levels they reached in the second half of 2020. Housing sales increased dramatically during the pandemic but have recently begun to level off. Cement sales can be expected to settle back at their pre-pandemic average.
Overall, the economic activity index is below where it was before the pandemic started. Employment could be expected to increase soon, but high gas prices as well as the upcoming hurricane season could be expected to maintain energy and gasoline consumption low. The upcoming disbursement of billions in federal funds should provide a boost to the local economy.