Puerto Rico’s economy has had a long and dynamic history, especially as it relates to its status as a US territory. The island is known especially for the incredible beaches and storied sightseeing destinations. This makes tourism one of its most important economic sectors. However, there is a lot about the industries in Puerto Rico that you may not know.
Up until the mid-1900s, agriculture was the main industry supporting Puerto Rico’s economy. The island, which had limited mineral resources, was largely neglected by Spanish colonial rulers. However, San Juan became a major trade port in the Caribbean. In the decades that followed World War II, factories and manufacturing became very important to the Puerto Rican economy under American rule. This shift happened because of government-sponsored economic development and social welfare programs. These developments supported private business and updated Puerto Rico’s transportation infrastructure.
Now, however, Puerto Rico’s economy has shifted into a service economy, as manufacturing growth has slowed in the past few decades. The services sector, which includes things like trade, tourism, finance, and government work, has quickly become the leading industry in Puerto Rico. The services sector accounts for around half of Puerto Rico’s GDP and employs up to 75% of all workers on the island.
Major Industries in Puerto Rico
The agriculture industry is still alive in Puerto Rico. However, it is nowhere near the most dominant industry. According to recent data, agriculture makes up less than 1% of Puerto Rico’s annual Gross Domestic Product (GDP).
Puerto Rico used to have a relatively large sugarcane production industry, but this has mostly ceased to exist. This is in large part due to government regulations on sugar companies in the US and its territories, as well as on producers abroad that import to the US. Puerto Rico does have a thriving rum production industry, but it imports most of the molasses necessary.
The three traditional farm products still produced in Puerto Rico are:
However, due to its tropical climate, many farms also produce tropical fruits including mango, pineapple, and melon. Additionally, there are beef, pork, and poultry farms that serve both local and international markets.
In 2010, the manufacturing sector made up 46.4% of Puerto Rico’s GDP. However, in the past decade, a few key changes have caused the closure of many Puerto Rican manufacturing plants. Firstly, global competition has increased. This has caused companies to look elsewhere to satisfy their growing demand. Additionally, the repeal of Section 936 ended a decades-long practice where US corporations had a tax exemption on income produced in US territories, including Puerto Rico.
Despite all this, Puerto Rico still has a relatively active manufacturing sector. Over half of the manufacturing industry relates to pharmaceutical production. Pharmaceuticals make up over half of Puerto Rico’s total exports. The pharmaceutical production industry in Puerto Rico is responsible for employing over 18,000 people. Chemical and chemical products, as well as computers and electronics, make up some other large parts of Puerto Rico’s manufacturing sector.
The service industry is Puerto Rico’s fastest-growing industry, and it has most recently overtaken manufacturing as Puerto Rico’s primary industry in terms of GDP production.
The three branches of Puerto Rico’s service industry, described in further detail below, are finance and real estate, trade, and tourism.
Finance & Real Estate
Finance, real estate, and insurance produce up to 20% of Puerto Rico’s annual GDP. Puerto Rico benefits from having its financial system fully integrated with the mainland American system, meaning that many American banks, real estate firms, and insurance companies have offices in Puerto Rico.
Trade accounts for about 10% of Puerto Rico’s annual GDP. Puerto Rico is included in the USA’s customs system, and the USA is Puerto Rico’s largest trading partner. The island’s key exports are pharmaceuticals, chemicals and chemical products, and computers and electronics. Puerto Rico also has significant trade agreements with Singapore, Japan, Brazil, and the European Union.
Tourist interest in Puerto Rico has continued to grow year after year. Tourists from both the mainland United States and from international destinations continue to be drawn to Puerto Rico’s stunning natural beauty, rich history and culture, and gorgeous tropical weather. In addition, many Caribbean cruises include San Juan as a stop. It is estimated that upwards of 5 million visitors stay at a hotel in Puerto Rico every year, with larger numbers of cruise ship passengers visiting annually as well. Tourism supplies an estimate of over $5.5 billion to the Puerto Rican economy every year.
Outlook: Which Industries in Puerto Rico are Poised for Growth?
The service industry in Puerto Rico is the most obvious for continuous future growth. Tourism interest will only continue to grow. Additionally, experts project growth in real estate and financial services for the foreseeable future as well.
Additionally, entrepreneurship is another area with potential for growth. Entrepreneurship is currently is still at the beginning of its growth in Puerto Rico. Nevertheless, many organizations focused on growing small businesses have begun to establish a presence on the island. The Puerto Rican government also has many programs that allow aspiring entrepreneurs to access funding.
A key factor that many companies tend to overlook is the importance of advertising. Advertising can help convey a brand’s image and desire to new and current consumers. This in turn helps to drive sales and foster brand loyalty. It’s extremely important to understand the local culture of the city, state, town, country, or territory that you hope to advertise in, and there’s no better way to do that than by working with a local advertising group.
How bMedia Can Help
No matter what industry your business operates in, bMedia’s experienced team can help you reach new customers across Puerto Rico. bMedia is Puerto Rico’s leader in outdoor advertising, with over 300 high-impact locations to choose from. Moreover, bMedia’s billboards statistically have the highest consumer traffic in Puerto Rico. bMedia leverages cutting-edge technology and industry-specific leading practices to ensure that your advertisement will be seen and noticed by the right customers. Feel free to contact us with any inquiries you have.