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H.Calero
Consulting Group, Inc.
Consumers:
A Moving Target
Puerto Rico 2014 - 2016
Where is Puerto Rico today
Gross Domestic Product 13
$103b
Gross National Product 13
$71b
Population 13
3.6m
Share of Manufacturing in GDP 47%
Income Per Capita 13
$17,413
Total Employment 7/14
0.99m
Inflation 7/14
1.3%
Unemployment rate 7/14
13.9%
Participation rate 7/14
39.6%
VEGA
BAJA
MANATI
TOA
BAJA
VEGA
ALTA
ARECIBO
MOCA
AGUADA
SAN
JUAN
TOA
ALTA
RIO
GRANDE
FLORIDA
SAN
SEBASTIAN
CIALES
AÑASCO
LARES
COMERIO
CEIBA
JUNCOS
NAGUABO
CAGUAS
OROCOVIS
LAS MARIAS
MAYAGÜEZ
GURABO
AGUAS
BUENAS
UTUADO
BARRANQUITAS
JAYUYA
CIDRA
ADJUNTAS
MARICAO
SAN
LORENZO
AIBONITO
VILLALBA
CAYEY
COAMO
SAN
GERMAN
CABO
ROJO
YABUCOA
YAUCO
PONCE
JUANA
DIAZ
LAJAS
SANTA
ISABEL
SALINAS
GUAYAMA
GUANICA
hcalero.com
Source: PR Planning Board, US Census Bureau, PR Department of Labor.
2
It is the worst recession
Base year = 100 (year prior start of recession)
1975
01-02
82-84
2006-13
Source:
hcalero.com
PR Planning Board & index by HCCG
Years
3
Less people, fewer jobs
Total employment (Peak before recession=100)
78
78.4
Months
Investment went down
Investment as % of GNP
Recession
Source:
hcalero.com
PR Planning Board
5
PR exports slowing down
$Billion
Trend
hcalero.com
6
Banking performance
$B
Total loans fall
Total assets down
$B
-22%
-38%
Bank delinquency
Profitability is low
$M
The public debt challenge
PR total public debt, $ billion
As of March, 2014
$47 b
$73.5b
$5.0 b
$4.1 b
$15 b
$24 b
$49.2 b
$14 b
hcalero.com
Source:
PR Government Development Bank
8
The economy relies on consumption
Consumption as % of GNP, 2013
Risk of personal debt as % of
personal income, 2013
Excludes mortgage debt
Bullet proof real consumption
Base year = 100 (year prior start of recession)
82-83
1975
01-02
2006-14
Source:
hcalero.com
PR Planning Board & index by HCCG
Years 11
Current recession & real
consumption
2006 = 100
Non
durable
Total
Durable
Source:
hcalero.com
PR Planning Board & index by HCCG
Services
Years 12
PR consumption & disposable
income
2006 = 100
Disposable
Income
Consumption
Source:
hcalero.com
PR Planning Board & index by HCCG
Years 13
Consumers’ debt
$ million
Families’ financial assets plunged
$ million
hcalero.com
15
Falling homeowner’s equity
PR house price index
Total growth = -13%
PRSI continues in recession
Monthly PRSI
20,208
Loss of $14
billion in wealth
Sep 12, 2014
2,190
2014
PR posts mixed results
HCCG quarterly economic Indices, 2Q 2014
Since 2005, PR’s population
began shrinking
Less population while seniors
explode
PR population, million
The gates are open in PR
Net migration (emigrants – inmigrants), 000s
’11–’12
-108
Est
’13–’19
-432
-540
Young people are leaving PR
Population by age group 2012, %
Emigrant
Men
PR population
Women
Gen Y – those born between 1976 and 2000
Men
Women
Middle class leaving PR
Median income, $000s
Emigrants
Total
population
Source:
hcalero.com
PR Institute of Statistics
Years 23
Women are winning
PR population by sex, %
Source: US Census Bureau
Maturing Population
Median Age
Years
Millennials still prevail in 2013
Population by Age Group
Who are the biggest spenders?
US Consumption Expenditures Survey 2013
hcalero.com
27
Which groups exhibit most growth
US Consumption Expenditures Survey 2003/2013
% growth
hcalero.com
28
Spending Patterns: <25
– They spend more on Housing, Transportation,
and Food
– Compared to other age groups, they spend
more on eating out
– Most growth from 2003 to 2013 has been in
Housing and Insurance
– Least growth has been on Transportation
Spending Patterns: 45-54
• This group spends the most
• It includes baby boomers who also
spend the most on Housing,
Transportation, and Food
• Compared to other age groups, they
spend more on entertainment
• Most growth is in Healthcare
• Least growth is in Transportation
Spending Patterns: 65+
• This group spends mostly on
Housing, Transportation, Food, &
Healthcare.
• Most growth is in insurance and
pensions
• Least growth is on Food
Full recovery will take time…
Forecast of US and PR real GNP growth
Forecast
FY
hcalero.com
Source: PR Planning Board & HCCG PR Macroeconomic Model
32
Years to return to 2005 GNP
Real GNP, $ million
13 years
hcalero.com
Source: PR Planning Board & HCCG estimates
33
Years to return to 2005 GNP
Real GNP, $ million
4 years
13 years
hcalero.com
Source: PR Planning Board & HCCG estimates
34
Consumption & Income
Baseline
History
Projected
% change, real
2011
2012
2013
2014
2015
2016
Consumption
1.5%
2.3%
2.4%
2.2%
1.1%
1.6%
Dispos.
Income
1.9%
-0.2% 1.6%
hcalero.com
Source: PR Planning Board & HCCG PR Macroeconomic Model
-0.5% -0.8% -0.4%
35
Growth of Internet users in PR
000s
Annual Growth = 14%
Source: World Bank, US Census estimates of population
Cell phones enhance mobility
Mobile cellular subscriptions (per 100 people)
2012
PR 7% annual growth
Source: World Bank
Ecommerce continued growth
Ecommerce as % of total sales
Source:
hcalero.com
EPA
38
The rise of social network
US social network users, million
Source:
hcalero.com
Facebook & Twitter
39
How knowledge speeds decisions
Without effective knowledge platform
Data gathering
Analysis
Response
Time
With effective knowledge platform
Data gathering
Analysis
Time
Response
40
Heidie Calero personally offers your clients, your management, or any
special group, a live presentation on how the economy is performing.
We use the latest available statistics and include our forecast on
inflation, GNP growth, retail sales, and unemployment, among others.
We use state-of-the-art presentation equipment, and professionallydesigned slide shows. The meeting is then, interactive and lively.
We guarantee the presentations are easy to understand, avoiding
economic jargon, and illustrating graphically the most complex concepts.
These conferences are free for the subscribers of our newsletter
Puerto Rico Economic Pulse.
Ask for a live presentation.
416 Ponce de León Ave. suite 1111, San Juan PR 00918
T. 787.756-5715 F. 787.756.4078
[email protected]