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Transcript of H.Calero
H.CaleroConsulting Group, Inc.
Puerto Rico 2014 - 2016
Consumers: A Moving Target
ADJUNTAS
AGUADA
AGUASBUENAS
AIBONITO
AÑASCO
ARECIBO
BARRANQUITAS
CABOROJO
CAGUAS
CAYEY
CEIBACIALES
CIDRA
COAMO
COMERIO
FLORIDA
GUANICA
GUAYAMA
GURABO
JAYUYA
JUANA
DIAZ
JUNCOS
LAJAS
LARES
LAS MARIAS
MANATI
MARICAO
MAYAGÜEZ
MOCA
NAGUABO
OROCOVIS
PONCE
RIOGRANDE
SALINAS
SANGERMAN
SANJUAN
SANLORENZO
SANSEBASTIAN
SANTAISABEL
TOAALTA
TOABAJA
UTUADO
VEGAALTA
VEGABAJA
VILLALBA
YABUCOAYAUCO
Where is Puerto Rico today
Gross Domestic Product 13 $103bGross National Product 13 $71bPopulation 13 3.6mShare of Manufacturing in GDP 47%Income Per Capita 13 $17,413Total Employment 7/14 0.99mInflation 7/14 1.3%Unemployment rate 7/14 13.9%Participation rate 7/14 39.6%
2hcalero.comSource: PR Planning Board, US Census Bureau, PR Department of Labor.
It is the worst recessionBase year = 100 (year prior start of recession)
2006-13
82-84
01-02
1975
Years 3hcalero.comSource: PR Planning Board & index by HCCG
Less people, fewer jobs
Total employment (Peak before recession=100)
Months
78 78.4
Investment went downInvestment as % of GNP
Recession
5hcalero.comSource: PR Planning Board
PR exports slowing down$Billion
6hcalero.com
Trend
Banking performance
Total assets down Total loans fall
Profitability is lowBank delinquency
-38% -22%
$ B
$ M
$ B
The public debt challengePR total public debt, $ billion
As of March, 2014 $73.5b
$14 b
$47 b
$24 b $49.2 b
$15 b
$4.1 b
8hcalero.comSource: PR Government Development Bank
$5.0 b
The economy relies on consumption
Consumption as % of GNP, 2013
Excludes mortgage debt
Risk of personal debt as % of personal income, 2013
Bullet proof real consumptionBase year = 100 (year prior start of recession)
2006-14
82-83
01-02
1975
Years 11hcalero.comSource: PR Planning Board & index by HCCG
Current recession & real consumption
2006 = 100
ServicesDurable
Total
Non durable
Years12hcalero.comSource: PR Planning Board & index by HCCG
PR consumption & disposable income
2006 = 100
Disposable Income
Consumption
Years13hcalero.comSource: PR Planning Board & index by HCCG
Consumers’ debt
$ million
Families’ financial assets plunged$ million
15hcalero.com
Falling homeowner’s equity
PR house price index
Total growth = -13%
PRSI continues in recessionMonthly PRSI
Sep 12, 2014
2,190
Loss of $14 billion in wealth
20,208
2014
PR posts mixed resultsHCCG 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
Est’13–’19
-432
’11–’12-108
-540
Young people are leaving PRPopulation by age group 2012, %
Emigrant PR populationMen Women Men Women
Gen Y – those born between 1976 and 2000
Middle class leaving PR
Median income, $000s
Emigrants
Total population
Years23hcalero.comSource: PR Institute of Statistics
Women are winning
PR population by sex, %
Source: US Census Bureau
Maturing PopulationMedian Age
Years
Millennials still prevail in 2013Population by Age Group
Who are the biggest spenders?US Consumption Expenditures Survey 2013
27hcalero.com
Which groups exhibit most growthUS Consumption Expenditures Survey 2003/2013% growth
28hcalero.com
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
• 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: 45-54
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
FY
Forecast
32hcalero.comSource: PR Planning Board & HCCG PR Macroeconomic Model
Years to return to 2005 GNP
Real GNP, $ million
13 years
33hcalero.comSource: PR Planning Board & HCCG estimates
Years to return to 2005 GNP
Real GNP, $ million
4 years
13 years
34hcalero.comSource: PR Planning Board & HCCG estimates
Consumption & Income
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% -0.5% -0.8% -0.4%
Baseline
35hcalero.comSource: PR Planning Board & HCCG PR Macroeconomic Model
Growth of Internet users in PR
Annual Growth = 14%
000s
Source: World Bank, US Census estimates of population
Cell phones enhance mobilityMobile cellular subscriptions (per 100 people)
Source: World Bank
PR 7% annual growth
2012
Ecommerce continued growth
Ecommerce as % of total sales
38hcalero.comSource: EPA
The rise of social network
US social network users, million
39hcalero.comSource: Facebook & Twitter
How knowledge speeds decisions
Without effective knowledge platform
40
Time
Data gatheringAnalysis
Response
With effective knowledge platform
Time
Data gatheringAnalysis
Response
416 Ponce de León Ave. suite 1111, San Juan PR 00918T. 787.756-5715 F. 787.756.4078 [email protected]
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 professionally-designed 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.