Tuesday, September 21, 2021

Puerto Rico Economic Development Bank: 80,000 Jobs Recovered

By on July 7, 2021

(Screen capture of www.bde.pr.gov)

Island had Lost 117,000 Jobs YoY in April 2020

SAN JUAN – The president of the Puerto Rico Economic Development Bank (EDB), Luis Alemañy, along with the economists from the institution’s Center for Economic Studies, Gladys Medina and Juan Carlos González, revealed Wednesday the recovery of more than 80,000 of the jobs lost during the COVID-19 pandemic.

“The Center for Economic Studies of the EDB reports that, in April 2020, total employment fell to its lowest point in more than 30 years, with a year-on-year reduction of 111,700 jobs,” said Alemañy. “However, 13 months from that date, over 80,000 jobs have been recovered in Puerto Rico.”

The executive said: “The trend is up; however, there is still a ways to go to return to pre-pandemic employment levels. More than 20,000 jobs have not yet been recovered. That is a goal that is projected to be reached with the number of job fairs and other initiatives that the Governor of Puerto Rico, Pedro Pierluisi, together with the Secretary of the Department of Labor, Carlos Rivera Santiago, has launched.” 

Alemañy pointed out that not all industries have recovered at the same rate, nor gradually, which does not seem to be the case with manufacturing, which proportionally did not lose as many workers during the first months of the pandemic, and recovered before the rest of the main categories of the private sector, now averaging employment levels that it had not reached since 2013.

Commerce and construction have also added employees so far this fiscal year.

“The recently created Center for Economic Studies of the Bank for Economic Development collects monthly data on non-farm payroll employment by industry produced by the Bureau of Labor Statistics of the Department of Labor and Human Resources (DTRH) of the Government of Puerto Rico, through the Establishment Survey,” he indicated. “The DTRH compiles these data from the payroll of non-farm establishments in Puerto Rico and classifies them using the North American Industry Classification System (NAICS),” Medina explained.

Medina emphasized that total non-farm payroll employment, not seasonally adjusted, registered 848,800 jobs in May, which represents an increase of 77,600, or 10.1 percent when compared with the same month last year, and is the second year-on-year growth after 12 YoY reductions.

“It is important to mention that the annual comparison corresponds to the period in which the closure of government agencies and companies was carried out as a measure to contain the COVID-19 pandemic,” Alemañy added.

In accumulated terms, this indicator for the July to May period of fiscal year 2021 reached 840,800 jobs, a 2.5 decline compared with the same period of the previous year.

“Private sector employment is grouped into seven main industries: Construction, logging and mining, Manufacturing, Commerce, Transportation, storage and Communications, Information, Financial activities and Services, three of which gained employees in accumulated terms in the 11 months elapsed of this fiscal year (July-May). In other words, there were industries that created jobs despite the challenges that the pandemic wrought,” EDB economist González Ruiz said.

The report indicates that wholesale and retail trade registered 154,700 jobs in May, a 20.5% increase YoY. The total from July to May of fiscal year 2021 averaged 152,400 positions, a YoY increase of 1.1 percent, or 1,636 additional employees.

“Manufacturing registered 77,500 jobs in May 2021: a rise compared to May 2020 of 6,900 employees, or a growth of 9.8 percent. The total from July to May of fiscal year 2021 was 76,300 jobs, or an average growth of 1,936 jobs, with the manufacture of clothing and chemical products as the fastest growing. This translates into 2.6 percent year-on-year growth,” Alemañy said. “In other words, with just one month remaining until the end of this fiscal year, it is foreseeable that employment in manufacturing will grow for the third consecutive year, and that, in addition, it will exceed the levels it presented since 2014 … the only economic sector that has shown growth consecutively in the last three years.”

The EDB president affirmed that, except for the category of Electrical Equipment, Appliances and Components, all the industrial subsectors that make up the manufacturing of both durable and non-durable goods, show positive growth trends in employment, similar to those of the main sector. The Chemical Products line, which includes the pharmaceutical companies that operate on the island, is the manufacturing category with the highest number of employees, with an average of 16,400 workers in May 2021, a figure that, when compared to the same month of the previous year, reflects an increase of 4.5 percent. Along with construction, economic activities related to the manufacturing industry were among the first authorized to restart operations last year, as early as May 11, 2020, which turned out to be key in the recovery of employment in this sector.”

“On the other hand, if it finds support in Congress, the budget bill presented by the White House for fiscal year 2022 could further boost our manufacturing sector, given that it grants a federal tax credit of 10 percent for the cost that a company assumes by relocating to the United States, including Puerto Rico. Specifically, the intention of the measure is aimed at encouraging the return to the United States of manufacturing companies.”

Medina highlighted that salaried employment in the construction sector will also end with positive results in fiscal year 2021, showing growth of 8.6 percent from July to May. In this sector, jobs related to the construction of buildings stood out, with an increase of 1,436 jobs, or 11.6 percent more than in the same period the previous year.

“Meanwhile, salaried employment in the service sector has experienced a total loss of 17,845 jobs, or a decrease of 5.4 percent during the period from July to May 2021. It is the sector most affected by the COVID-19 pandemic, which coincides with trends in employment globally. Within this sector, the subsectors with the greatest reduction in employment are those related to hotels and educational services,” the economist said.

However, González said that “both subsectors have postponed restarting their activity as COVID-19 infections increased at certain times. The in-person return to schools, post-secondary institutions, universities and professional schools, and the next high season for external tourism on the island, which according to the Puerto Rico Tourism Company runs from late November to early April, are factors that should positively impact employment in these industries.”

Download the EDB reports here http://www.bde.pr.gov/bdesite/PRED.html.

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