San Juan – The secretary of the Department of Economic Development and Commerce (DDEC), Manuel Laboy Rivera, announced on Monday, the development of the Index of Coincident Indicators in Manufacturing, a new tool for metrics and analysis of the economic activity of said sector and highlighted that it reflected that the industry maintains a recovery rate.
“The most recent report for October 2020 reflected that manufacturing continues to gain ground despite having registered during April 2020 one of the most significant monthly drops in a long time due to the total closure decreed due to the spread of Covid-19 . Industrial activity, measured by the Index of Coincident Indicators in Manufacturing, when compared to the month of September of the current year increased 0.9 percent, ”Laboy Rivera said in a written communication.
However, when comparing the reading of October 2020 with the same month of the previous year, the Index of Coincident Indicators in Manufacturing registered a decrease of 2.0 percent, a direct consequence of the reduction in economic activity due to the Covid pandemic. -19. This is the most attenuated annual reduction since the pandemic began and represents the seventh consecutive fall of the Index after having registered 19 increases in a row before the lockdown, showing that this factor interrupted a recovery process in the sector.
The secretary of the DDEC explained “these results respond to the development of this new index that his work team designed and tested for a year, using the most recent econometric techniques for the construction of composite number indices, using a strong practical, empirical basis. and methodological after 70 years of experience in this field. Some of the functions of the Manufacturing Coincident Index are: to identify and analyze short-term turning points in the economy; to analyze the impact of the cycles of the economy of Puerto Rico and the United States, as well as the world in reference to local analysis, among others ”.
The methodology used in this tool is based on the formulas used by The Conference Board. These formulas have an index development base already used for several decades.
This index has been being computed internally for more than a year as a test period and like any metric instrument, its behavior and design was constantly analyzed to detect changes in the economic structure of Puerto Rico and recalibrate it in order to keep it up to date. vanguard in the development of statistical tools.
The components associated with the manufacturing sector of the Index of Coincident Indicators in Manufacturing are: Non-Agricultural Wage Employment; Payroll; Hours worked; Indexed Trade Balance; and Industrial Energy Consumption.