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EMBARGOED UNTIL RELEASE AT 10:00 A.M. EDT, Monday, September 27, 2021

BEA 21-45

Gross Domestic Product for Puerto Rico, 2019

First Official Release of GDP for Puerto Rico, 2012–2019

Real gross domestic product (GDP) increased 0.3 percent in 2019 after decreasing 2.4 percent in 2018, according to estimates released today by the Bureau of Economic Analysis (BEA). The statistics released today are BEA’s first official release of GDP for Puerto Rico. The release includes updated estimates for 2012 to 2018 that incorporate new and additional source data and methodology improvements to the prototype GDP statistics that were released in September 2020.

As shown in chart 1, the increase in real GDP in 2019 reflected an increase in exports. Although private inventory investment, government spending, and consumer spending declined, these decreases were largely offset by a decrease in imports, which is a subtraction item in the calculation of GDP (table 1.4).

Chart: Puerto Rico: Contributions to Percent Change in Real GDP

Pharmaceuticals and organic chemicals were the largest contributors to both the growth in exports and the decline in imports in 2019 (table 3.4). Exports increased 0.7 percent, while imports decreased 9.1 percent (table 3.3). The primary contributor to the decrease in private inventory investment was the chemical manufacturing industry, which includes pharmaceutical manufacturers.

Government spending decreased 11.4 percent in 2019 as spending on disaster recovery activities slowed (table 1.3). The largest decline was in gross investment in structures by the central government as major repairs to the power grid, which was damaged in 2017 by Hurricanes Irma and Maria, were completed in 2018 (table 4.1.3).

Consumer spending decreased 0.5 percent in 2019. Purchases of durable goods decreased 3.6 percent as disaster-related insurance payouts and government payments to households, which supported consumer spending in 2018, declined (table 2.3).

Puerto Rico GDP includes production owned by nonresidents, such as nonresident multinational enterprises. In Puerto Rico, subsidiaries of large nonresident multinational enterprises operate within the pharmaceutical manufacturing industry, as well as the medical device manufacturing and computer services industries. The Box in the Technical Note provides an update of research provided in 2020 that shows GDP excluding exports, imports, and inventory investment associated with these intellectual property-intensive industries.

Official Estimates of Puerto Rico GDP for 2012–2019

As part of the transition from prototype to official statistics, BEA is instituting a routine release and update cycle for these estimates that is similar to other BEA data products. Much of the source data that BEA uses to prepare the Puerto Rico GDP estimates is drawn from administrative or survey data that, over time, will provide more comprehensive or relevant information. For the earliest “preliminary” estimates, the GDP statistics are based on partial information sets that are supplemented with less comprehensive or less direct indicators of economic activity. Due to lags in the availability of source data, in particular for private inventory investment and central government spending, the estimates presented in the news release are preliminary for 2017–2019. For more information on updates to previously published estimates, see the Technical Note.

Federal Economic Data Used to Estimate GDP for Puerto Rico

Although federal economic data collection alone is not sufficient to measure all components of Puerto Rico GDP, the federal economic data sets that include Puerto Rico are the foundation that makes the estimation of Puerto Rico GDP possible. These data sources include the Economic Census of Island Areas, U.S. Trade with Puerto Rico and U.S. Possessions (FT895), U.S. International Trade in Goods and Services (FT900), the Quarterly Census of Employment and Wages, the Decennial Census of Population and Housing, the Puerto Rico Community Survey, and various price index programs from the Bureau of Labor Statistics. More information on these data sets is available in the Fact Sheet: Federal Economic Data That Make BEA’s Puerto Rico GDP Estimate Possible on BEA’s website.

For more information on the data sources and methodologies that underlie the estimates, see the Summary of Methodologies: Puerto Rico Gross Domestic Product on BEA’s website.

Acknowledgments

Because Puerto Rico is not included in most of the major surveys used by BEA to estimate U.S. national GDP, the support and assistance provided by the government of Puerto Rico has been critical to the successful production of these estimates. BEA appreciates the information provided by numerous organizations and individuals in Puerto Rico, including (in alphabetical order) the following:

The Economic Development Bank for Puerto Rico, Office of Economic Studies
The Office of the Commissioner of Insurance of Puerto Rico
The Puerto Rico Department of Economic Development and Commerce
The Puerto Rico Department of Labor and Human Resources
The Puerto Rico Department of the Treasury
The Puerto Rico Electric Power Authority
The Puerto Rico Industrial Development Company
The Puerto Rico Institute of Statistics
The Puerto Rico Planning Board

Full Release & Tables (PDF)

Tables Only (Excel)

Technical Note (PDF)

Summary of Methodologies: Puerto Rico Gross Domestic Product (PDF)

Technical

Sabrina Montes

(301) 278-9268

territories@bea.gov

News Media

Jeannine Aversa

(301) 278-9003

Jeannine.Aversa@bea.gov

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Definitions

Gross domestic product (GDP) is the value of the goods and services produced by the Puerto Rico economy less the value of the goods and services used up in production. GDP is also equal to the sum of personal consumption expenditures, private fixed investment, change in private inventories, net exports of goods and services, and government consumption expenditures and gross investment.

Personal consumption expenditures (PCE), also referred to as “consumer spending,” measures the goods and services purchased by “persons”—that is, by households and by nonprofit institutions serving households (NPISHs)—who are resident in Puerto Rico.

Private fixed investment (PFI) measures spending by private businesses, nonprofit institutions, and households on fixed assets in the Puerto Rico economy. Fixed assets consist of structures, equipment, and intellectual property products that are used in the production of goods and services.

Change in private inventories (CIPI), or “inventory investment,” is a measure of the value of the change in the physical volume of the inventories—additions less withdrawals—that businesses maintain to support their production and distribution activities.

Net exports of goods and services is the difference between exports of goods and services and imports of goods and services. Exports measures the portion of total Puerto Rico production of goods and services that is provided to the rest of the world. Imports measures the portion of total Puerto Rico expenditures that is accounted for by goods and services provided by the rest of the world.

Government consumption expenditures and gross investment, or "government spending," measures the portion of GDP that is accounted for by the government sector. Government consumption expenditures consists of spending by government to produce and provide services to the public. Gross investment consists of spending by government for fixed assets that directly benefit the public or that assist government agencies in their production activities.

Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is, at "market value." Also referred to as "nominal estimates" or as "current-price estimates."

Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.

Preliminary estimates are based on source data that are incomplete and subject to revision.

Statistical conventions

Quantities and prices. Quantities, or “real” volume measures, and prices are expressed as index numbers with a specified reference year equal to 100 (currently 2012). Quantity and price indexes are calculated using a Fisher chain-weighted formula that incorporates weights from two adjacent years. “Real” dollar series are calculated by multiplying the quantity index by the current-dollar value in the reference year and then dividing by 100.

Chained-dollar values are not additive because the relative weights for a given period differ from those of the reference year.