Puerto Rico Consumer Spending — which contracted by an average of 1.8% annually during the period — measures the goods and services purchased by Puerto Rico’s households. The largest decreases in real consumer spending occurred in 2014 and 2017, with about 2.9% and 2.4% drops, respectively.
The data released Tuesday is the first under a collaborative agreement that the BEA reached with the government of Puerto Rico late last year, as this media outlet reported.
According to the data, in 2014, as wages dropped and consumer prices continued to increase, residents reduced their spending on both goods and services. The declines within goods were widespread; the largest decreases were for motor vehicles and “other” non-durable goods, which includes items such as medicine and clothing.
In 2017, Hurricanes Irma and María caused catastrophic damage that restricted residents’ access to many goods and services. The decreases in health care, housing and utilities, and “other” services (including education) were especially large, the BEA confirmed.
The BEA released prototype statistics for consumer spending, private fixed investment, and net exports of goods for Puerto Rico.
In the segment of private fixed investment (PFI) — which measures spending by private businesses, nonprofit institutions, and households on fixed assets in the Puerto Rico economy — the agency grouped the spending into three categories: structures, equipment, and intellectual property products.
“After decreasing in 2013, real PFI for Puerto Rico increased for four consecutive years. From 2013 to 2017, real spending grew 3.2%. The growth reflected increases in equipment spending and in spending on intellectual property products, including research and development,” the BEA’s data showed.
“These increases were partly offset by a decrease in spending on structures. The decline in structures reflected a large decrease in spending on residential structures that was partly offset by an increase in spending on nonresidential structures,” the agency added.
In 2017, spending on nonresidential structures increased, reflecting the rebuilding of commercial properties in the months following Hurricanes Irma and María.
“In contrast, spending on residential structures decreased, reflecting the continued drop in demand for homes consistent with the downward trend in the population, coupled with an even further decline after the hurricanes,” it concluded.
Source: News Is My Business