WIOA State Plan Common Elements

II. a. 1. A. Economic Analysis

The Unified or Combined State Plan must include an analysis of the economic conditions and trends in the State, including sub-State regions and any specific economic areas identified by the State. This must include –

• Puerto Rico Economic Overview

The evolution of the Economy of Puerto Rico in the Past 50 Years shows that P.R. moved from an agrarian economy in the 1960’s, with the production of sugar cane and tobacco, to an industrial economy targeting petrochemical, electronics, needle and textiles manufacturing, in the period from 1970’s until 2000.

The 21 century and the globalization launched the economy transformation to advanced manufacturing, service and knowledge economics, in industries like advance pharmaceuticals, medical devices, biotechnology, food, export services, etc. Beyond the 2000’s the PR economy are moving to the aerospace industry.

Real GNP growth in Puerto Rico has experienced long-term stagnation from fiscal 1970 onwards, with the average annual growth in real GNP per decade since 1950 becoming progressively smaller for almost the entirety of the 1950-2018 period. Between the onset of the actual contraction in 2006 and 2018, the economy has contracted by 24.1%. Fiscal year 2018 real GNP contracted at -4.7%, mostly reflecting the impact of Hurricane María.

Moreover, the growth gap between the local economy and that of the mainland has widened considerably since 2000. The performance of the U.S. economy does have an impact on our economy, but the impact has weakened. During the second half of the 80s, P.R.’s real GNP growth averaged 3.6%, while in the case of the US it was 3.8%. Since 2007 until fiscal 2018 it declined an average of -2.0%, while the US economy expanded at an average annual rate of 1.7%.

In 2006, Congress ended special tax breaks that historically aided the Puerto Rican economy. The island's job market has been ailing ever since. While the mainland U.S. added millions of jobs following the Great Recession, Puerto Rico never got back on its feet. Between the onset of the current contraction in 2007 and 2019, the economy has lost 171,658 salaried jobs (net), most of them public jobs, while over half of those lost in the private sector were in manufacturing.

Outlook for the fiscal and economic crisis

• In the past decade more than 300,000 people have left Puerto Rico. The impact of Hurricanes Irma and María accelerated this trend with an additional 600,000 people or 19% decline expected by FY22.
• Student population has declined by over 40% since 2000 with an additional 16% decline expected by FY22.
• About 43% of Puerto Rico residents live in poverty, which is the highest poverty rate of any U.S. state (Mississippi is the next highest at 19.7%). Puerto Rico’s 8.2% unemployment rate (In 2019) is almost three times the national level.
• Concerns about quality of life, poor delivery of public services and high unemployment have led to a historic population exodus.
• Puerto Rico is treated unequally under key federal programs such as Medicaid as compared to states. For example, the Census Bureau has reported that Oregon, a relatively prosperous state with a population similar in size to Puerto Rico, received over $29bn from the Federal Government, whereas Puerto Rico received $19bn for the same year (GAO Report United States March 2014: Information on How Statehood Would Potentially Affect Selected Federal Programs and Revenue Source).
• Periods of fiscal irresponsibility and lack of economic planning and transparency also contributed to Puerto Rico’s financial crisis
• Overestimation of economic growth projections resulted in massive deficits that were covered with one-time measures and debt financing
• Frequent policy changes and lack of economic planning led to economic decline.
• The Economic Activity Index remained on the negative side, excepting 2012, until 2017. The recuperation afterwards reflects the recuperation and investment undertaken as a result of Hurricane María.
• Unchecked fiscal deficits between 2001 and 2008 led to a recurrent practice of deficit financing, resulting in a 131% growth in public debt during the period.
• An increase in expenditures and public debt led to a consistent decline in Puerto Rico’s credit ratings, except for the period between 2009 and 2012. (Puerto Rico Credit Rating FY00 –FY16: S&P Rating on General Obligation Bonds).
• Lenders enabled the island's debt binge -For years, bond holders extended credit to Puerto Rico, capitalizing on federal, state and municipal tax advantages. But the lending continued well into the 2010s, when the island was careening toward economic chaos. Like a subprime borrowing that can't afford to pay for a huge mortgage, Puerto Rico was broke — but the credit was provided anyway. The additional debt compounded the island's crisis.

Basic Economic Facts:

• Privileged geographical location: Easy access to U.S., Latin America and Europe.
• Population: 3.2 million (as of July 2018)
• Languages: Spanish & English
• Direct flights to major cities
• Puerto Rico residents and businesses are subject to the legal protection of both the U.S. and the Puerto Rico Constitutions.
• GNP (2018): $68.1.1billion
• GDP (2018): $101.1 billion
• GNP PER CAPITA (2018): $20,874
• EXPORTS VALUE (2018): $60.6 billion
• IMPORTS VALUE (2018): $46.5 billion

  Table 1 - Puerto Rico Economy World Rating

                         Source: The World Bank Group, Economy Rankings 2017

Socioeconomic Conditions

The median household income is the lowest in the US, equivalent to a half of the lowest in the nation, and three time lower than the US Median. In 2018, the U.S. Median Household Income ($mm’s) was $57,652, meanwhile for PR was $20,166, a difference of -65% (United States Census Bureau, 2020).

  Table 2 - Socioeconomics Welfare Conditions

Source: U.S. Census Bureau (2019). American Community Survey 5-Year Estimates; Kids Count Data Center (2020). Data.

Since 2000 the economic activity index reflected a downward trend, reaching a decrease of -6.0% in 2017, a reflection of the impacts of the hurricanes in September. Afterwards, though, the EIA has moved up as a result of the reconstruction activities post-María.

Total public debt in circulation increased from $24.2 billion in fiscal year 2000, to $69.0 billion in fiscal year 2017. Overestimation of economic growth projections resulted in massive deficits that were covered with one-time measures and debt financing.

  Table 3 - Total Public Debt in Circulation of Puerto Rico ($Mm)

Population Decline

One important demographic trend that characterize Puerto Rico’s economy is the decline in population, in particular after 2010. Between 2010 and 2019 there has been a reduction of 532,000 persons. That trend is expected to continue, with a further decline to 3.1 inhabitants by 2022.

One factor in that decline is emigration. Net migration has been increasing steadily since 2011. By 2018 net migration rose to 123,400 people, reflecting the impact of Hurricane María.

 Structure of Production: Gross Domestic Product (GDP)

Manufacturing represents almost half of the total value of economic production, but services do have also an important share. The pharmaceutical industry is still the key industry in manufacturing, with aerospace, computer and electronic increasing their economic impact among the manufacturing industry. The current manufacturing sector relies in high technology, medical device, chemical, and electronics.

Transformation and Innovation in The Wake of Devastation

After hurricanes Irma and María, thousands of people lost their jobs, schools were closed, government services and private enterprise could no longer operate effectively, landslides caused flooding hazards, and wastewater polluted marine environments. The Government of Puerto Rico views the recovery efforts as an opportunity to transform the Island by implementing solutions that are cost effective and forward looking, that harness innovative thinking and best practices, and revitalizes economic growth.

Recovery efforts are an opportunity to use recovery investments to help transform the Island by implementing solutions that are:

• cost-effective and forward-looking;
• harness innovative thinking and best practices from around the world; and
• contribute to greater economic development, revitalization, and growth as well as enhanced human capital.

Puerto Rico’s recovery plan sets out a path to help guide recovery investments toward this broader transformational vision by:

• defining what recovery means for Puerto Rico;
• establishing principles for how the Government of Puerto Rico, nongovernmental, private, and nonprofit agencies should work together towards recovery;
• describing the phases, the recovery will progress through;
• identifying the most pressing recovery issues and the priority actions, as well as potential partners and resources to address each issue; and
• committing to measuring and reporting on the progress of the recovery.

The Central Recovery and Reconstruction Office of Puerto Rico

The Government of Puerto Rico— through the Central Recovery and Reconstruction Office (CRRO), established by executive order in 2017 and now also known as the Central Office of Recovery, Reconstruction, and Resilience (COR3), is in charge of developing this recovery plan in response to the “Further Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2018” (Public Law No. 115-123). COR3 plans to use third-party assistance to manage recovery funds and optimize the long-term reconstruction process.

Development of The Recovery Plan

The plan was developed over the course of three dynamic and overlapping phases:

1. Identifying damage, needs, and priorities for recovery
2. Identifying potential courses of actions (and their related costs)
3. Aligning the plan objectives and courses of action and identifying funding sources.

Fiscal transparency and strong Governance

Transparency is a key guiding principle of Puerto Rico’s entire recovery process.

The Central Recovery and Reconstruction Office of Puerto Rico,as a division of the P3 Authority, have the authority to centralize and oversight of the recovery and reconstruction of Puerto Rico. It will ensure that the Government of Puerto Rico can implement reconstruction efforts with efficiency, effectiveness, and transparency.

The COR3’s responsibilities are to:

• Monitor contracting for compliance and effectiveness purposes.
• Implement and enforce checks and balances for procurement and approval of contracts and payments.
• Deploy a proven grant-management software and provide external visibility via frequent status updates to its public website.
• Coordinate and channel all efforts and activities of the Government related to recovery efforts.
• Process, finance, and execute works and infrastructure projects related to recovery efforts.

PROMESA ACT

Since July 1^st, 2016, Puerto Rico is under federal legislation geared to the goal of restructuring Puerto Rico’s public debt, and stabilizing government spending and long-term growth.

The Puerto Rico Oversight, Management, and Economic Stability Act, Pub. Law 114-187 (“PROMESA” or the “Act”), was enacted into law on June 30, 2016. The Senate had passed PROMESA on June 29, 2016, and President Obama signed the Act into law on June 30, 2016. PROMESA is a federal legislative enactment. PROMESA includes a variety of provisions applicable to Puerto Rico, its instrumentalities and their liabilities and operations.

The Act established a seven-member Board, the members of which are designated by Congress and the President. The Oversight Board is provided with broad authority over Puerto Rico and instrumentalities of Puerto Rico, which the Oversight Board designates as “covered” instrumentalities. A key authority of the Board is that no budget can be submitted to the Legislature unless the Oversight Board has approved a fiscal plan, and the budget is consistent with the fiscal plan. The Oversight Board can submit its own budget if the governor’s budget is not acceptable.

A critical component of PROMESA is the requirement that Puerto Rico and covered instrumentalities must develop and maintain a fiscal plan. The first fiscal plan was submitted by the Board on September 2016. The most recent one was approved in May of last year. Also, in September the FOMB issued its Debt Adjustment Plan, as required under Title III of the Law, with the purpose of restricting the public debt and stabilizing debt repayment in the coming years.

Provide an analysis of the industries and occupations for which there is existing demand.

Industry sectors in general

As shown in table below, the principal industrial sectors with the highest share of GDP output in FY 2018 were Manufacturing (47.3%), Real Estate and Rental (15.88%), Government (6.37%), Retail Trade (5.2%), and Finance and Insurance (4.47%). These top five sectors comprised almost 80% of Puerto Rico’s 2018 GDP output.

  Table 4 - Series of Income and Product, Total, and Per Capita: FY 2005, 2011, 2014, 2018

 Source: PRPB, Statistical Appendix 2014.

From FY 2005 to FY 2018, the top nonfarm industrial sectors that were able to expand their share of GDP were Manufacturing, Real Estate and Rental, Information, and Health Care and Social Services. Moreover, the sectors that experienced a drop in their share of GDP were Government, Finance and Insurance, and Construction.

When focusing on the changes in GDP output among major industrial sectors between 2014 and 2018, additional movers emerged with Management of companies and enterprises increasing by 36.3%, Professional, Scientific and Technical services by 23.9%, and Transportation and Warehousing by 19.9%. On the other hand, Construction, Government, and Educational services have diminished the most by -23.6%, -17.7%, and -17.6%, respectively.

The table below depicts the major industrial sectors with the highest estimated jobs for the first two quarters of 2019. Out of the 39 sectors and subsectors, 23 (59%) had an uptick in employment and 16 (41%) experienced a decrease between 2017-2019.

The largest employment sectors were Retail Trade (14.5%), Government (13.9%), Health Care and Social Services (10.5%), and Educational Services (9.7%). Together, they made up almost half (48.6%) of employment in 2019. The sectors that declined the most during this period were Agriculture (-21.9%), Educational Services (-10.5%), Government (-8.5%), Utilities (-7.6%), and Information (-6.8%).

  Table 5 - Employment Estimates by Major Industry, Q1-Q2 2019

 Source: PRDOLHR, OES Estimates, 2017, 2019.

Occupations

In 2018, the occupations with the largest net gain in employment between 2014 and 2018 were Assemblers and Fabricators, Combined Food Preparation and Serving Workers, Business and Financial Operations, Middle School Teachers, Cooks, and Teacher Assistants, among others.

Moreover, the top hiring occupations in 2018 were Business and Financial Operations (42,300), Security Guards (28,290), Registered Nurses (19,230), Stock Clerks and Order Fillers (17,790), and Combined Food Preparation and Serving Workers (13,720). These positions combined had an average hourly wage of $12.60 in 2018.

 Table 6 - Occupations with the largest increase in employment, 2014-2018

Source: BLS (2019). OES.

Tablebelow shows the principal occupations that are projected to have the largest expansions (in absolute terms) between 2016 and 2026, according to Puerto Rico’s Department of Labor and Human Resources (PRDLHR) report on skills and occupations in high demand. The top five occupations that are estimated to have the highest numeric change between 2016 and 2026 are Combined Food Preparation and Serving Workers, Security Guards, Janitors and Cleaners, Pharmacy Technicians, and Waiters and Waitresses.

Of the top 30 occupations, 20 (66.7%) had San Juan as the local area with the largest employment increase. Another 5 (16.7%) were in the Caguas-Guayama region.

TableII-4 below highlights the occupations with the largest decreases in employment (in absolute terms) between 2014 and 2018.  The top occupations that fell the most were Office and Administrative Support, Sales and Related, Retail Salespersons, Production, and Food Preparation and Serving Related occupations.

Within these occupations, the ones with the highest employments were Office and Administrative Support (153,920), Sales and Related (98,120), Food Preparation and Serving Related (64,890), Production (55,240), and Transportation and Material Moving Occupations (42,780).

  Table 7 - Occupations with the largest projected increase in employment, 2016-2026

Source: PRDOLHR, Long Term Projections by Occupation 2016-2026.

Note: Only includes occupations with 2,000 or more jobs in 2016. For confidentiality reasons some local area data was not disclosed.

On the other hand, the occupations that have had the largest net losses between 2014 and 2018 are Office and Administrative Support Occupations, Sales and Related, and Retail Salespersons with a combined total of 36,040 jobs. Furthermore, the occupations that have contracted the most during this period were Food preparation workers (-34%), First-Line Supervisors of Food Preparation and Serving Workers (-28.9%), and Laborers and Freight, Stock, and Material Movers, Hand (-24.5%).

  Table 8 - Occupations with the largest decrease in employment, 2014 and 2018

Source: BLS (2019). OES.

According to the forecasts done by PRDLHR from 2016-2026, the occupations that are estimated to reduce substantially are Office Clerks, Executive Secretaries and Executive Administrative Assistants, Secretaries and Administrative Assistants, Police and Sheriff’s Patrol Officers, and Sewing Machine Operators.

Most of the occupations that are estimated to decrease are in San Juan (70%) while 13% are in the South and 10% are in the Caguas-Guayama region.

  Table 9 - Occupations with the largest projected decrease in employment, 2016-2026

Provide an analysis of the industries and occupations for which demand is emerging.

Industry Sectors in General

Construction Sector Insights

Construction is one of the largest industry sectors in Puerto Rico. Although it has been decreasing due to the housing crisis of 2006, it is expected to grow in the following years. This is due to the reconstruction funds allocated by the federal government following the 2017 hurricanes.

This growth will require training and retraining of members of the labor force to satisfy the demand of labor in this sector. The training required for these trades is not commonly offered in traditional post-secondary institutions.

Source: PR Department of Labor & Human Resources (2020). Household Survey.

As stated before, the construction sector in Puerto Rico will grow in the following years, requiring trained personnel to satisfy the increase in demand. In 2018, the construction sector exhibited its first growth in employment since 2012. During those years, the disbursement of federal funds for diverse reconstruction and recovery projects had a positive effect in the amount of employment in this sector. In the year 2012, when the American Recovery and Reinvestment Act had been in effect, the employment in the construction sector increased by 11.3%. Following a similar pattern as in 2012, employment increased in the years 2018 and 2019, the same time period in which FEMA funds were assigned to the island. Since these disbursements are only 30% from the total allocated funds for recovery, it can be argued that employment in the construction sector will be steadily increasing until all funds have been disbursed.

  Table 10 - Construction Employment

    Source: Estimates by Estudios Técnicos, Inc.

Among other effects of the arrival of federal recovery funds are the increase in the construction sector employment. According to estimates from Estudios Técnicos, the average increase in employment in the construction sector will be of 3,230 per year. In total, approximately 16,000 jobs in the construction sector are estimated to be created from 2020 to 2023.

In addition to the total increase in employment, the turnover in the construction sector needs to be considered for training purposes. The employment turnover consists in the percentage of job openings that are posted at the end of a period. This means another amount of potentially new workers in the field. As reported by the U.S. Bureau of Labor Statistics, the rate of job openings in the construction sector for December 2019, was 3.1%. This rate was applied to the previously presented projections and the results are presented in the following table.

  Table 11 - Construction Training Demand

        Source: Estimates by Estudios Técnicos Inc

        Note: The construction industry turnover is published by the Bureau of Labor Statistics:

                           https://www.bls.gov/jlt/

The total sum of the new employees per year and the industry turnover results in the total demand for training for that year. The total training demand is almost 25,000 persons. It is worth mentioning that not all these jobs belong to trades that are associated with formal instruction.

Below follows an estimate of which instructional programs (CIP) -post-secondary educational programs, of any length- will be needed to satisfy this increase in job openings in the construction industry.

 Table 12 - Educational Program to Satisfy the Job Opening in the Construction Industry

Source: IPEDS data, 2020. Bureau of Labor Statistics, 2020. Estimates by Estudios Técnicos.

A conversion from the occupation to instructional program was applied to determine the projected demand for instructional disciplines in the construction sector. Using a crosswalk from the Analyst Resource Center, the occupation by SOC code was converted to instructional programs by CIP codes. From the crosswalk and labor data, one can observe that the relationship between employment and instructional programs is not always one-to-one but may be one-to-many or not have a relationship with an instructional program at all. This information is reflected in the construction sector as it is found that there are multiple construction jobs, including construction laborers, that are non-degree requiring occupations and, therefore, are not represented by any CIP code.

Life sciences: pharmaceutical manufacturing

Two segments of the pharmaceutical industry are currently experiencing excellent growth in the world’s markets: (1) generic medications and (2) biologicals. Therefore, the panorama for growth in both fields represents an excellent opportunity for Puerto Rican labor. Some of the strategies involve:

• Protecting existing pharmaceutical operations through collaboration with companies in this sector
• Actively intervening in the sale of closed plants or plants in the process of closing, ensuring a connection to interested companies so that they may take over or adapt the operation of those plants, thereby minimizing downtime
• Fostering the establishment of a pharmaceutical industry specializing in the production of generics and biologicals, using local capital investment. Use the Puerto Rico Industrial Development Corporation (PRIDCO) as a partner for businesses
• Attracting retail packaging and distribution operations to complement already existing manufacturing operations
• Developing local abilities for pharmaceutical research and development in order to create intellectual property in Puerto Rico
• Developing joint training programs with universities and companies in the private sector in order to strengthen the future labor force and offer better job and growth opportunities

With five decades of pharmaceutical manufacturing, Puerto Rico has a highly experienced workforce knowledgeable in GMP, FDA and other global regulations. Although 60% of employees in the life sciences have at least a bachelor's degree, Puerto Rico offers the lowest labor costs of any region under U.S. jurisdiction – with hourly earnings in manufacturing averaging 65% to 80% of the U.S. average.

Life sciences: manufacturing of medical devices

This sector is expected to experience a growth rate of 6% per year through 2020. Puerto Rico is in a unique position to take advantage of this trend, with an impressive history of $4.5 billion in exports in the manufacturing of medical devices, along with thirteen of the world’s twenty largest firms in this sector are in Puerto Rico. Some of the strategies involve:

• Attracting new lines of production to companies established in Puerto Rico
• Fostering research and development, and manufacturing of new products in Puerto Rico
• Focusing promotional efforts in high-growth sectors and corporations, especially including companies in the fields of orthopedics, trauma, invasive surgery, and visual devices
• Attracting companies within the medical devices supply chain, in order to consolidate the cluster and expand growth horizons
• Workforce advantages in this sector are comparable to that of the pharmaceutical manufacturing subsector.

Agricultural biotechnology

According to Puerto Rico Industrial Development Company, Puerto Rico has emerged as an important center for agricultural biotechnology. There's ongoing research with corn, soy, sorghum, sunflower, cotton, among others since 1983. It is one of the fastest growing sectors and is supported by the following conditions: year around stable weather and environmental conditions, skilled and professional labor, soil quality, proximity to the U.S., rapid transportation system, agricultural academic research centers, and intellectual property protection. Pioneer Hi-Bred, BASF Agrochemical, Bayer-Crop science, Syngenta Seeds and Rice Tec are among many seed companies that have found the island to be fertile ground for research and development. The sector is made up of 18% of all agricultural employment (over 2,500 employees). Puerto Rico must become a center for the scientific production and improvement of seeds in Latin America, and it must become a leader in an industry that is slated to grow at 6% per year. Some of the strategies involve:

• Supporting the expansion of production by companies currently doing business in Puerto Rico by preparing personalized offers
• Attracting additional companies in this sector by promoting existing incentives, infrastructure, and talent in Puerto Rico
• Fostering additional research and development in this sector

A highly educated workforce is sustained by an array of current programs, including: those offered at the Biotechnology Development and Training Center at the Mayagüez campus of the UPR, which is a public-private initiative that offers customized training programs for students and employees with degrees in science and engineering. In addition, pharmaceutical professionals who want to transition into the life sciences. There is a five-year bachelor's degree in industrial biotechnology from the UPR, Mayagüez campus, and Ph.D. programs in biomedical science from the UPR, Medical Sciences campus, and the Ponce School of Medicine/Pontifical Catholic University of Puerto Rico.

Outsourcing

Puerto Rico is quickly emerging as a knowledge-services hub both for online monitoring as well as telecommunication-related operations like call centers. Income from outsourcing or expert services at the global level is estimated to be some $506 billion in the first half of 2018[1]. The industry is composed of four segments: (1) outsourcing of information technology, (2) outsourcing of business processes, (3) outsourcing of knowledge processes, and (4) outsourcing of engineering and R&D. Some of the strategies involve:

• Creating an outsourcing cluster linking universities, the private sector, and government
• Developing training programs in coordination with universities and companies in this sector, which includes offering students’ internships in various companies within the sector
• Attracting large operations offering Business Process Outsourcing (BPO) and integrated outsourcing services through aggressive and personalized promotion
• Promoting the development of local software for eventual export, through promotion of current legislation
• Expanding the aerospace and defense sector, paying special attention to outsourcing in the area of research and development

Maintenance, repair, and operations (MRO) cluster

The MRO market is projected to total $76 billion by 2022, some 36% more than the current $56 billion. The trend shows that airlines are increasingly interested in outsourcing their secondary activities. An MRO cluster could represent as much as $600 million to the GDP with important effects on small and medium businesses and local economies. Aside from the principal services of assembly, cleaning, and coordination, most of the jobs are provided by businesses with fewer than 10 employees. Puerto Rico’s MRO cluster would be located in the aerospace triangle in the northwest part of the island, whose center is in Aguadilla. This region has proved itself to be one of the driving forces of the aviation industry in Puerto Rico, with emphasis on the aerospace industry. Some of the strategies involve:

• Beginning operations of Lufthansa Technik in 2015
• Creating an MRO school in Aguadilla and adapting its program to current university curricula in order to ensure quantity and quality of the labor force, helping to support the industry’s development
• Identifying opportunities for set up businesses and creating links to the existing aerospace industry in Puerto Rico

A highly educated and skilled workforce supports this sector. Puerto Rico is home to two of the top 35 largest engineering programs in the nation at the Polytechnic University of Puerto Rico and the UPR, Mayagüez Campus. More than 20,000 degrees in science, engineering and technology are awarded each year by colleges on the Island.

Tourism

A Destination Marketing Organization (DMO) seeks to professionalize and give consistency to Puerto Rico’s brand as a major tourist destination in the Caribbean and be recognize as a premier destination globally.

Tourism marketing strategies beyond the act will be based on the needs and trends of the national and global market. Through the DMO, Puerto Rico will display as a trademark the culture, natural sites, culinary experiences, and entertainment.  Among its first initiatives should be the creation of a permanent brand for Puerto Rico. The brand will help leave behind the inconsistency of the brand and react quicker to market needs.

The Corporation for the Promotion of Puerto Rico as a Destination (DMO) officially begun its work on August 2, 2017, with the appointment of its board members and the creation of internal committees. 

Aerospace

​​In recent years, Puerto Rico has become a magnet for some of the world's leading aviation and aerospace companies. With a long history of manufacturing expertise and a strong pipeline of engineering talent, the island has attracted multimillion-dollar investments by these and other major firms during recent years:

• Pratt & Whitney is performing engineering design and analysis for the jet turbine power plants of several aircraft from its Infotech Aerospace Service's division. 
• Lockheed Martin has more than 60 employees conducting software support services from Puerto Rico for its global operations.
• Honeywell Aerospace employs more than 400 people in its shared services center that supports the company's global defense and space business.
• Hamilton Sundstrand manufactures aircraft climate control and electronic systems at its Puerto Rico plant, employing more than 900 workers.
• AXON Group and Pratt & Whitney established a world-class SAP services center that will create 300 jobs.
• Florida Turbine and ESSIG Research both have major operations on the island.

Employment Forecasting

According to PRDOLHR's Long-Term Occupations Demand 2016-2026, the top three industries of mayor employment growth will be in Food, Health, and Administrative services. Furthermore, the industries with the highest projected employment are Self-Employed (132,587), Administrative and Support (72,958), Food Services and Drinking Places (70,228), Ambulatory Health Care (43,777), and Professional, Scientific, and Technical services (32,174).

 Table 13 - Industries estimated job increases

 Source: PRDOLHR: Long Term Projections by Industry 2016-2026.

As per the same report, the industries with the largest estimated employment decreases between 2016-2026 are State and Local Government, and Educational Services, signifying in a potential reduction of around 30,000 jobs.

 Table 14 - Industries with largest estimated job decreases

 Source: PRDOLHR: Long Term Projections by Industry 2016-2026.

[1]  FN: IDC (2018). Worldwide Services Revenue Led by Steady Growth in the Americas During the First Half of 2018, According to IDC (November 15, 2018). At: https://www.idc.com/getdoc.jsp?containerId=prUS44448618.

With regard to the industry sectors and occupations identified in (A)(ii) and (iii), provide an assessment of the employment needs of employers, including a description of the knowledge, skills, and abilities required, including credentials and licenses.

Industries

In 2018, the industries with the most difficult establishments to fill vacancies were Other Services, Agriculture and Mining, Real Estate and Leasing, and Professional, Scientific, Technical Services. Additionally, the jobs with the highest rate of job vacancies were Transportation Warehousing (49.3%), Agriculture and Mining (27%), and Utilities (22.6%).

  Table -  15 Industries with most difficult to fill vacancies, vacancies' rates and over-qualification rates, 2018

 Source: PRDOLHR, Skills and Occupations in High-Demand, 2018.

Occupancies

Out of the top ten occupancies with vacancies most difficult to fill, three required high school diploma or equivalent while four did not require any formal educational credential. Moreover, four of the occupations were related to repair, maintenance, and/or equipment work. Another two were associated with food preparation and fast food cooks.

 Table 16 - Occupations with the most difficult to fill vacancies, 2018

Source: PRDOLHR, Skills and Occupations in High-Demand, 2018.

Table below shows the skillsets that are most sought from employers, according to the PRDOLHR employee survey. Punctuality and responsibility remain as top skills followed by the ability to follow instructions, verbal and written communication, teamwork, and customer oriented. Most of the essential abilities required can be labeled as “soft skills”, meaning that employers are looking for employees that meet skills beyond technical and academic competencies.

The over qualification rate could be used as a proxy of the industries in need of more education and training. Industries with low over qualification rate means that the new employees had the exact or less level of education recommended for the position. The industries with the lowest over-qualification rates were Management, Utilities, educational services, and professional, scientific and technical services.

 Table 17 - Most important skillsets sought by an employer, 2018

 Source: PRDOLHR, Skills and Occupations in High Demand 2018