LQ Analysis

One of the biggest challenges of planning is to understand the local and regional economic environment in which a community or city develops. Understanding the current state of the regional or local economy includes its strength, weakness, opportunities, and treats is needed to formulate effective strategies and actions in order to face the new challenges. For that reason, the ERSF used a Location Quotient (LQ) Analysis (developed by an ERSF Team Member from FEMA), which is one of the most common tools of the Economic Base Analysis (EBA).

The use of LQ provided a better understanding of the regional and local economies of Puerto Rico in the following areas:

• What is the trend experimented (growth and decline) by each sector of the municipal economy?
• What is the current employment situation in the municipality?
• How is the regional or municipal economy doing compared to its neighbor municipalities or other regions and the Commonwealth economy?
• What are the new opportunities for job growth?