Small Business in Puerto Rico

Hunter’s Center for Puerto Rican Studies created an analysis of the Census Bureau’s data on small businesses in  Puerto Rico in the summer of 2020. At that time, 65.4% reported that their businesses had been affected by COVID-19 with a large negative effect. Another 29% had seen a moderate negative effect.

This was significantly worse than the effects reported across the nation as a whole. At the time, 51.4% of U.S. businesses in general had seen a large negative effect and 38.5% had seen a moderate negative effect.

In total, more than 94% of Puerto Rico’s small businesses saw a moderate or large negative effect, while 89% of U.S. businesses in general had seen such effects.

COVID-19 restrictions

Puerto Rico’s restrictions in response to COVID-19 were among the strictest in the United States. Half of Puerto Rican businesses have faced mandated closures, compared with 8% in Arkansas and 6% in South Dakota.

Governor Pierluisi has announced that he will loosen the restrictions, maintaining curfew but only from 11:00 p.m. to 5:00 a.m. and ending the Sunday lock-down. Beaches will be more accessible, and travelers can come to Puerto Rico as long as they have a negative COVID-19 test within 72 hours of their arrival.

The changes are intended to provide more flexibility for small businesses.

Puerto Rico has a less robust medical system than states, so keeping the transmission of the coronavirus as low as possible has been essential. However, Puerto Rico is now administering vaccinations — and the new governor has declared a “fiscal emergency.”

As of August 2020, the Island’s labor department was estimating that 20 to 30 per cent of small businesses would close permanently. but there are no current figures to confirm the prediction. Puerto Rico’s unemployment rates are the highest in the nation, according to the most recent figures from the U.S. Labor Department.

Is it the economy?

A survey conducted last month by the Puerto Rico Chamber of Commerce suggests that COV ID-19 is not the biggest problem. only 29% of respondents listed coronavirus restrictions as their primary problem. 54% named the overall economic position of the Island. Taxes, government red tape, and energy costs were among the top concerns.

The Bureau of Labor Statistics reports that 22% of Puerto Rico businesses are having problems with logistics, making it hard for them to move goods.

Puerto Rico has been facing a severe recession for years. The economy was further harmed by Hurricane Maria. However, the Island’s political status as an unincorporated territory has been an ongoing economic burden.

The continued loss of population is an additional threat to the Island’s economy. Respondents to the Chamber of Commerce survey said that finding workers was a problem, even though unemployment is high in Puerto Rico.

Optimism

Nonetheless, there is optimism among small business owners in Puerto Rico. The Small Business Administration points out that entrepreneurs were opening new businesses at a blog rate of 4.2% in 2018. And even the Census data from 2020 reports that 64% of small business owners expected their businesses to be back to normal within six months.

 

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