The economy of Puerto Rico is closely linked to the United States economy. Consequently, factors that impact the U.S. economy also have great influence in the local economy. Some of those economic variables are oil prices, interest rates, and U.S. direct investment, U.S. exports, and U.S. inflation.
Puerto Rico has a diversified economy where manufacturing and the tertiary sector comprise its major players. Manufacturing is the largest sector in terms of gross domestic product. Manufacturing in Puerto Rico is now more diversified than during the earlier phases of the Island's industrial development. In the last three decades, industrial development has tended to be more capital intensive and more dependent on skilled labor. In labor terms, the service sector became recently the largest employer, while manufacturing is playing a lesser role in this aspect.
The tertiary sector (which includes finance, insurance, real estate, trade, transportation, communications, utilities, and other services) has shown a strong interaction with manufacturing, construction, tourism, and agriculture.
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| 1 TCPU - Transportation, Communications, and Public Utilities. 2 FIRE - Finances, Insurance, and Real Estate |
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Puerto Rico is heavily dependent on oil imports for the production of electric power. However, as a result of the construction of two co-generation plants (coal and natural gas), Puerto Rico's dependence on oil imports for the production of electricity has been reduced from 99% to 74%.
The Puerto Rico Planning Board's preliminary reports on the performance of the Puerto Rico economy during fiscal year 2007 indicate that the Gross National Product (GNP) registered a 1.8% decrease in real terms. GNP in fiscal year 2000 was $41.4 billion and grew to $58.7 billion in fiscal year 2007. This represents a total increase of 42% during those years. Additionally, in fiscal year 2007 personal income per capita was $13,491 compared to $13,033 in 2006 and $10,204 in 2000, a total increase of 32% for that period.
According to the Department of Labor and Human Resources, during fiscal year 2007, the labor force was 1.41 million compared to 1.42 million in fiscal year 2006. The average unemployment rate decreased from 11.7% during fiscal year 2006 to 10.4% in fiscal year 2007.