Manufacturing in Puerto Rico has managed to recover significantly from the economic ravages caused by the COVID-19 pandemic and reach levels of activity that have not been experienced since 2018, boosted by the pharmaceutical sector.
According to the Purchasing Management Index (PMI), in March, manufacturing stood at 61.1, suggesting positive performance in the industry. For the manufacturing sector to be at appropriate levels, activity needs to remain above 50.
Although the PMI reflected a slight decrease of 1.7 points compared to the 62.8 reported in February, the index still remains above 60. The industry did not report numbers higher than that figure since June 2018 when it registered manufacturing activity of 61.1 points.
Rodrigo Masses, director of the Alliance for the Economic Development of Puerto Rico, in a statement to THE WEEKLY JOURNAL, said that the rebound in the manufacturing sector is due to a large extent to the activity of the health manufacturing industry on the island, whose operations were not interrupted during the pandemic, contrary to other segments.
"Healthcare manufacturing does not respond to the economy's cyclical reaction. Puerto Rico is a specialized health manufacturing jurisdiction. We have several factories of medical and pharmaceutical devices operating which, in turn, have a whole supply chain that requires and benefits other manufacturing segments," Masses stated.
The executive had indicated in an interview with THE WEEKLY JOURNAL that the increase in demand for products related to the response of the countries to the coronavirus pandemic would greatly benefit Puerto Rico, given that the island maintains the highest density per square mile and per capita of pharmaceutical manufacturing in the world.
"The health segment has become the backbone of manufacturing. There is a huge emphasis on health and the next few months will see a lot of investments in this segment, so the positive trend is going to continue. This also goes hand in hand with the United States' concern to have control of pharmaceutical assets and critical health elements," Masses added.
He was echoed by Iván Lugo, executive director of Induniv, who told your correspondent that exports of pharmaceuticals and medical devices made from Puerto Rico represent 66 percent of the island's total exports. He also pointed out that both sectors represent 34 percent of the island's Gross Domestic Product (GDP) and over $40 billion in revenues.
"Most of the index is influenced by health manufacturing, which accounts for the majority of exports. These products are exported to more than 86 countries around the world. We have not had any negative impact during the pandemic, on the contrary, we continue manufacturing," Lugo said.
According to data from the Pharmaceutical Industrial Association (PIA), 12 of the 20 pharmaceutical products most used in the world are manufactured in Puerto Rico. The island's pharmaceutical industry generates 18,000 direct jobs and 60,000 indirect jobs.
Public Sector Reacts
Manuel Cidre, secretary of the Department of Economic Development and Commerce (DDEC, Spanish acronym), attributed the recovery of the manufacturing-to-consumer industry that has been generated in recent months to the economic injection that has been reaching the island.
"We are seeing a sustained recovery in manufacturing, which —according to the latest indicators— we can predict that it will continue to improve, until it reaches the point where it was before the pandemic and exceeds it. We are making every effort to maintain the trend in this sector, supporting the manufacturing sector with all the DDEC's resources," Cidre stated.
The official reported that new manufacturing opportunities are being developed for Puerto Rico. He announced that the agency is in talks to bring to the island the manufacture of microsensors, the shortage of which keeps assembly work in car manufacturing plants at a standstill.
"There are opportunities. You have to know how to take advantage of them and Puerto Rico has that capacity. Today more than ever, the island is on the map of the United States as never before," he affirmed.