Puerto Rico’s manufacturing sector achieves stability during past 33 months
In what he called an “accountability report,” Manuel Cidre, secretary of Puerto Rico’s Department of Economic Development and Commerce (DDEC, in Spanish) said the island’s manufacturing sector has maintained stability over the past 33 months.
“This sector has achieved a level of stability that doesn’t come out of nowhere; Puerto Rico has advantages over other jurisdictions,” he said.
The sector is showing a “palpable recovery” he said, evidenced by the most recent Index of Coincident Indicators in Manufacturing, released in December, which at 112.6 points, is the highest since 2009’s 118.8 points.
The index for December 2023 showed a 3.4% increase from the same month the previous year, marking the 33rd consecutive rise since April 2021, representing an 11.8% increase over that period, the report shows.
“These types of rates had not been recorded for two decades, which indicates that the sector is solid despite all the challenges that lie ahead,” said Humberto Mercader, DDEC deputy secretary, mentioning global supply chain issues, ongoing military conflicts and escalating geopolitical tensions in critical areas of global trade such as the Middle East and the Red Sea.
During a roundtable with the press, Cidre discussed the arrival of companies in “nontraditional” industries — information technology, digitization and aerospace, for example — saying they have lifted sector jobs and are paving the way for “an industrial revolution.”
“Puerto Rican manufacturing must be diversified, knowledge-based, precisely in the face of the new global trends of what manufacturing is,” Cidre said, citing increased automation and artificial intelligence as examples of those tendencies.
Víctor Merced, director of the DDEC’s Business Development Office, said, “We’re seeing the greatest level of employment since 2012. Manufacturing is recovering in Puerto Rico and is becoming more sophisticated and will create more jobs, perhaps not as many as before, but more sophisticated, which puts us in competition with the cream of the crop in Puerto Rico.”
“The main factor to attract this type of company is our human capital capacity,” Merced emphasized.
The index showed that manufacturing created 83,700 jobs as of December, with a payroll of approximately $144 million.
Government officials touted the manufacturing sector’s multiplier effect on the economy, estimating it at 10-fold, generating new activity around plants.
“Manufacturing leads economic development efforts, which in turn guarantee a better quality of life, a reduction in poverty, a reduction in inequality,” said Merced. “You just have to look around whenever one of these businesses opens, it benefits the restaurant around the corner, the service providers, who are local.”
Cidre mentioned the government’s role in attracting new business and supporting expansions, considering itself a partner to the private sector.
“I tell them, I’m another employee of yours. You need to tell me what you want to do and, based on that, is how we’ll act,” said Cidre.
“We’re going to see trends that will be difficult, like electricity costs, but we look for ways to help them because we have to stay competitive,” he said, while mentioning initiatives such as building co-generation facilities and improving the electric grid’s stability as ways to help manufacturing operations experience the least number of disruptions possible.
“Confidence in Puerto Rico is great, but these aren’t things that are done in one day. They have a maturation period while we get a project to get off the ground,” said Cidre, referring to recent expansions by such companies as Ethicon y Sartorius as examples.
