Puerto Rico Compass ©

Q4 2006: The Puerto Rico Economy is Still in Distress

A Review of Q4 of 2006

Puerto Rico’s economy is still far from claiming the beginning of a recovery. The leading index signals a positive 0.9% growth in Q4 of 2006. However, other indices, such as manufacturing continued falling with –0.7%, consumption and the coincident indices plunged –0.9% while banking posted 1.8% and the leading index surged to 0.9% growth. Although four of the six indices depict a negative trend, the island’s economic scene remains less volatile but still hampered by political gridlock.

Puerto Rico Economic Pulse ©

December 2006: Getting to Know the Sleepy Cayman

Changes in Cuba could impact Puerto Rico

Cuba is still a kind of black box for many of us. Despite the many cultural, historical, idiosyncratic and even familiar bonds with Cuba, Puerto Rico has no economic relations with its neighbor.  Nonetheless, after nearly five decades of a very centralized economy, some recent developments are signaling that the current socioeconomic system in Cuba is about to change. It is definitely time for us to know more about Cuba and understand the implications for Puerto Rico of the foregone Cuban transition towards a market economy. When will Cuba open? Will it entail the demise of tourism and manufacturing in Puerto Rico? Or, will this transformation open up opportunities for PR? Do not miss this interesting analysis on this very strategic issue for Puerto Rico.

Puerto Rico Economic Pulse ©

November 2006: Banks Facing Up to the Yield Curve

An analysis of Puerto Rican banks’ profitability

The banking industry in Puerto Rico has enjoyed record profitability and relatively low to none failure rates in recent years. This scenario contrasted with the 1980’s when turbulent economic conditions, the crisis in the savings and loan industry, and a highly volatile interest rate environment placed the banking industry both in the US and in PR under severe stress. More recently, the banking sector in PR has suffered a death of a thousand cuts. Will this sector heal from its main wounds: the living and dynamic yield curve and the ongoing economic downturn in the island? What does an inverted yield curve suggest for the future of this economy? Find out how movements in short and long term rates are affecting local banks’ performance in Puerto Rico.

Puerto Rico Economic Pulse ©

October 2006: Is Puerto Rico ready for Assisted Living?

An analysis of the elderly population and long term care facilities

They never cease from changing culture. Facing retirement, the baby boomer generation will not just cause the over-sixty population to increase dramatically, but will change what it means to be elderly. With a higher education level, major income and mostly women, the demographics of elderly are also changing. Nonetheless, according to different worldwide surveys more than the 60% of the baby boomer generation have no plans to meet their retirement care needs. Is the island prepared to meet the needs of this population? Are there enough housing options for the elderly? Is there an opportunity to create a healthy new industry in the island?  Find out some answers in this issue of Economic Pulse.

Puerto Rico Compass ©

Q3 2006: Puerto Rico Weathers the Storm

A Review of Q3 of 2006

Although the economic horizon remains cloudy, its descent appears to have begun to stabilize during the 3rd Quarter of 2006. In this rapidly changing world, consumers are now demanding quicker more efficient service from businesses. PR Compass provides a comprehensive picture of the PR economy by computing and analyzing six quarterly indices. This tool provides real time data and analysis relating to PR’s economic environment. During this quarter the coincident index fell –0.4% compared to the same quarter in 2005. The local fiscal crisis seems to have been overcome. The banking index grew 3.1% indicating resiliency in this sector. Manufacturing fell –2.3% with no recovery in sight. Consumers feel the burn with –2.5% in the index. Construction followed suit with –0.6%. For the next six months, the leading index stabilizes at –1.6%.

Puerto Rico Economic Pulse ©

September 2006: Is Carmania over in Puerto Rico?

On the latest trends and perspectives for the car market in PR

Puerto Ricans cannot live without the beloved automobile. Every day, nearly two million cars storm highways in Puerto Rico. Since 1995, annual car sales have surpassed 100,000 units. As if this were not enough, the industry hit two back to back records in 2004 and 2005. However, an industry that was enjoying its greatest boom ever is also feeling the adverse winds beating Puerto Rico. Car sales have dropped this year by nearly 12% compared to last year. With an uncertain economic landscape and some taxes around the corner, the worst may be yet to come. Find out how the current situation may alter perspectives for the car market in Puerto Rico in the coming months.

Puerto Rico Economic Pulse ©

August 2006: Is Puerto Rico Missing an Opportunity?

An overview of the worldwide boom of tourism

The outstanding growth of tourism has turned this industry into one of the most dynamic economic forces around the world. Modern tourism features a clear upward trend, backed by millions of people traveling throughout the world. A vast and novel array of tourist services and increasing competition among destinations lure more and more tourists every year and fuel the development of this sector. In addition, tourism has become an engine of growth and an important source of jobs in some developing countries. This issue reviews the amazing performance of tourism over the past years. We also analyze the current situation of this industry in Puerto Rico, its opportunities as well as the challenges ahead.

Puerto Rico Economic Pulse ©

July 2006: The Engine of the World Economy

On the role of women in the economy and society overall

If you think China, India, and other emerging economies are the new engines of the world economy, you are wrong. Women are now the largest force behind economic growth across the globe. More and more women are joining the labor force, and making a substantial contribution in many fields. High achievements in education, democracy, and other favorable changes have led women to play a key role as executives, professionals, technicians, and even in the political stage. This issue reviews some of the highlights of this worldwide evolution, that pundits have named womenomics. We will also assess the role of women in the Puerto Rican society and review one of the most controversial issues in Puerto Rico: the labor market.

Puerto Rico Economic Pulse ©

June 2006: A Reply to “The Economist”

An overview of the other side of Puerto Rico’s story

Rarely had the prestigious British publication, The Economist, taken time to look into Puerto Rico’s economy. This time, it focused on several aspects of which Puerto Ricans are certainly not very proud. Lower levels of employment than in the states and high levels of public aid and welfare enrollment are undeniable. However, once the poorhouse of the Caribbean, Puerto Rico became the shining star of this area. Fifty years ago, the island underwent a quiet revolution and has become a world-class center for pharmaceutical production. Yet, this side of the story was not told. Find out other facts The Economist failed to fairly expose regarding Puerto Rico.

Puerto Rico Economic Pulse ©

May 2006: Braving the Changing Tide

An overview of the banking sector in Puerto Rico

Banks are of the undisputable leaders of local firms in PR. They have grown at an impressive pace, and have backed consumers’ avid spending. In the aftermath of September 11, some investors found a shelter in PR bank stocks to bypass financial blues on the mainland. However, the tide has changed and the giants of the local economy are not living their best days. Plummeting stocks, an inverted yield curve, new taxes, and a fiscal mess on the island have darkened banks’ landscape. This issue reviews the situation of the banking sector and analyzes the upcoming tough times and the many challenges and opportunities lying ahead.