Tag:
0

Employment in Puerto Rico Grows 3.5% in 2021

Intelligent Economics > Analysis > Employment in Puerto Rico Grows 3.5% in 2021

Non-farm payroll employment reached a total of 866,200 in Puerto Rico during the month of December 2021. Compared to December 2020, this is an increase of 3.5%. Compared to November 2021, there was a decrease of 1,100 (0.1%). This was the first month with a decrease in employment since May 2021.

The category with the largest decrease in employment was retail sales, which went down by 1,600 (1.3%). The increase in COVID contagions in December due to the Omicron variant led to many consumers avoiding retail spaces. This has been confirmed by Google Mobility data as well as by many of our own clients. This decrease was offset by an increase in government employment of 1,300 (0.7%). The only major categories that had increases were manufacturing (0.4%) and education services (1.3%).

2021 was overall positive for employment on the island. Compared to December 2020, all categories except for finance had increases in employment. The decrease seen in finance was only 100 (0.2%). Two outliers in terms of recovery include leisure and hospitality and educational services.

Leisure and hospitality, which represents employment mostly in hotels and restaurants, increased its total employment by 9,500 (13.5%) in 2021. The tourism industry on the island managed to bounce back this year, with hotel registrations up to the month of November surpassing the total for 2019. Employment in this category in January 2022, however, could see another decrease due to more aggressive COVID measures being put in place.

Compared to March 2020, employment on the island is still down by 21,100 (2.4%). The only two major categories with increases relative to before the pandemic are construction (7.9%) and manufacturing (4.7%).

Government employment is the category with the largest overall decrease (7,900, 3.9%), followed by health services (4,200, 4.9%), professional and business services (3,800, 3.1%), and finance (2,500, 5.5%). Government employment could be stable at this new level, particularly given the government’s current situation with its new debt payments. Employment in health services will take longer to recover. The postponement of non-essential medical procedures due to COVID has led to many hospitals suffering financial difficulties. Structural changes in the labor market due to work from home and many other issues have led to decreased employment and more employees quitting amongst office workers, which could explain the large gap for the other two remaining categories.

Employment growth on the island in 2022 will depend on two main factors. The first is the decline in COVID contagions. Now during the end of January, new contagions have declined. In order for employment to resume growing, this tendency must hold.

The second is the arrival on the island of infrastructure and recovery funds. All growth predictions for the island are based on billions in federal funds being used to fuel construction on the island, as well as new infrastructure projects. What this could mean is that economic and employment growth could end up depending more on political factors than any other macroeconomic issues.

Related Posts

Leave a Reply