Hiring and Bankruptcies are Both Up, as the Economy Restructures in Plain Sight

Puerto Rico’s employers head into the final quarter of 2026 with one of the strongest hiring outlooks in the world. At the same time, Puerto Rico’s courts are on pace to process more bankruptcies this year than in any year on record. So, where does the island economy actually stands?

The hiring outlook is the work of the latest ManpowerGroup Employment Outlook Survey, released Tuesday, which puts the net employment outlook for October through December at 34%, 19 points higher than a year ago and five points above the global average, ranking Puerto Rico 13th among the 42 countries ManpowerGroup measures.

It follows a record third-quarter reading in which the island tied India for the world’s highest hiring intention.

Read against a month of Caribbean Business reporting on where that demand is coming from, and against the indicators pulling the other way, the survey looks less like a quarterly snapshot than evidence of a structural shift, an economy adding jobs in tourism, creative industries, reshored manufacturing and homegrown companies faster than households, small businesses and the state can keep up.

“The diversified economy is happening before our eyes, but so many people in government and the private sector seem inclined to miss the trend.”

Alberto Bacó Bagué

What the survey found

Hiring expectations rose 19 percentage points year over year, even as they fell 12 points from the previous quarter, which ManpowerGroup had called its strongest Puerto Rico result in the four years it has surveyed the island.

Melissa Rivera Roena, the firm’s general manager on the island, said Puerto Rico ranks 13th among 42 countries this quarter, down 12 spots, but holds the world’s second-highest long-term hiring intention at 19%, trailing only Panama’s 26%.

Forty-eight percent of employers plan to add staff before year-end, 39% expect no change, 11% plan reductions and 2% remain undecided, producing the net 34% figure. Entry-level hiring is a particular focus, with 57% of employers planning to add initial-level roles, a sign, the report says, that companies are building pipelines for longer-term growth.

Faster internal approvals, tighter coordination between HR and hiring managers, flexible work arrangements and AI-assisted recruiting have all sped up the process of filling openings.

Regionally, the metro area leads at 43%, followed by the central region at 42% and the east at 32%; the north (28%) and south (23%) trail. Smaller employers are the most bullish: companies with 10 to 49 workers report a 55% outlook, the strongest of any size band, while microbusinesses under 10 employees report just 17%. Every sector surveyed showed gains, led by commerce and logistics at 53% and manufacturing and information tied at 44%, with the public sector, health and social services lowest at 19%.

Globally, India (54%) and Brazil (53%) lead; Puerto Rico’s 34% beats the 29% global average and outpaces Canada, Belgium and Finland. Employers cited a shortage of qualified candidates, fewer referrals and complex recruitment processes as the main brakes on hiring, and the report notes that “technology is reshaping staffing strategies even as overall hiring remains strong.”

The survey polled 500 non-client employers between July 1 and 31. The next edition, covering the first quarter of 2027, is due in December.

Where the hiring is coming from

The sectors leading the survey match the growth engines Caribbean Business has tracked in various stories published just over the past month, and the map looks little like the one Puerto Rico’s economy was drawn on over a generation ago.

The visitor economy, per a 2025 Foundation for Puerto Rico analysis, has overtaken manufacturing as the island’s top source of direct employment, with leisure and hospitality payrolls above 100,000 and total visitor-related employment past 115,000; direct visitor spending was projected at $7.8 billion for 2025.

That demand is pulling a supply chain behind it, from event-production firms like Ekelon, which just completed a $350,000 expansion, to new hotels from Río Grande to Santurce.

The creative industries feeding that same demand now generate $8.7 billion a year and support more than 87,000 jobs, Puerto Rico Creativo says, with Bad Bunny’s residency alone carrying an estimated $200 million to $713 million economic impact.

Manufacturing, which tied for second in the survey, is riding a reshoring cycle that produced $476 million in committed capital investment and 3,186 new jobs in fiscal 2025, per Invest Puerto Rico, at an average salary nearly double the island’s overall wage.

The governor’s own tally counts 29 completed projects worth $2.618 billion in private investment and 5,069 new jobs. Payrolls have recovered from a 2020 floor near 73,900 to roughly 84,000, though the monthly series has been flat since.

The survey’s strongest reading, though, sits with small companies: employers of 10 to 49 workers post a 55% outlook. Colmena66’s network reported 22,100 jobs created and 10,100 businesses launched or scaled in 2024, Parallel18 counts more than 500 active startups, and the state registered 27,439 new corporations in fiscal 2026, up 16.9%.

The labor force in the formal economy stands at 1.2 million with participation at 44.6%, its highest in 16 years, and private-sector employment is at a record 758,400. But that, again, does not include employment in the informal economy, which a separate CRECE study placed at 66% of public-assistance recipients.

The lids on the growth

The same July labor survey behind those numbers also showed unemployment ticking up to 6.0%, from 5.8% in June and 5.6% a year earlier, with 75,000 people looking for work. People are entering the labor force faster than employers are absorbing them.

Then there’s the signal coming from bankruptcy court. According to Boletín de Puerto Rico, August brought 531 filings, up 12% year over year, pushing the eight-month total to 4,146 and putting 2026 on pace for a record. July was worse, with 556 filings and Chapter 7 liquidations up 47.2%, per Boletín de Puerto Rico data.

Economist Chantal Benet Arbona has traced the surge, which has returned filings to pandemic-era levels, mainly to the cost of living, a reading that matches Colmena66’s 2025 survey, where 76% of business owners named inflation an obstacle and 63% cited unreliable electric service.

Policy, that is, is moving slower than the economy. The 793-page Planning and Permitting Code the administration calls central to its growth strategy has been pending since June without a floor vote, and DDEC’s own secretary says the private sector isn’t ready to fully back it.

The tax-equality bill from the governor’s first fiscal package, for its part, remains in House committee, with a vote hoped for before the session closes Nov. 17. Energy still costs roughly two and a half times the mainland rate, not to mention the ongoing water crisis.

The workforce the survey cannot see

A third variable the survey cannot capture may explain part of what employers mean when they cite a shortage of qualified candidates.

The study mentioned above released last week by the Center for Economic Renewal, Growth and Excellence (CRECE) found that 89% of able-bodied recipients of the Nutrition Assistance Program, which covers more than a million people, generate income through work, and 66% do so informally, selling food, providing care, doing construction or yard work.

More than half of respondents feared a formal job would leave them worse off, since a modest raise can trigger the loss of benefits or Medicaid coverage; 69% preferred a gradual phase-down over an abrupt cutoff.

ManpowerGroup polls 500 employers about payroll intentions. It cannot poll the informal workforce about whether it would take one. That implies a formal labor market that is almost certainly tighter than the survey implies, and the 44.6% participation rate understates how many Puerto Ricans are already economically active.

The employers planning entry-level hires are, in effect, competing for workers the benefits cliff has priced out of accepting the job, a policy constraint rather than a motivation problem, and one the island could in principle remove.

The AI question, for now

The survey’s note that automation is reshaping staffing strategies lands in a market where displacement evidence is thin.

Labor Secretary María del Pilar Vélez Casanova told Caribbean Business last week that employers report no notable AI-driven job losses and are training staff rather than replacing them, consistent with U.S. research finding no economy-wide job destruction thus far.

That same research, from Stanford’s Digital Economy Lab, finds the effect concentrated in reduced hiring of workers 22 to 25 in the most exposed occupations, precisely the entry-level cohort 57% of local employers say they plan to hire.

Puerto Rico has no system that would detect such a shift if one were underway, even as 84% of island organizations already run at least one business function on AI, above the global rate.

An economy restructuring in plain sight

Add it up and the picture is less a hot quarter than a change of shape. For half a century Puerto Rico’s growth arrived on schedule: a multinational chose the island, announced a plant, named a headcount. The hiring intentions in this survey are coming instead from hotels and convention floors, recording studios and event warehouses, 10-person companies scaling to 50, and a manufacturing base reshoring even as it automates.

That is the diversified economy the island’s private sector has argued for since the Section 936 debates of the early 1990s, arriving less by design than by accumulation.

“The diversified economy is happening before our eyes, but so many people in government and the private sector seem inclined to miss the trend,” Alberto Bacó Bagué, the former Economic Development Bank president and Economic Development secretary, told Caribbean Business last week.

The survey suggests he is right about the trend. The bankruptcy data, the unemployment uptick and the stalled reform agenda suggest he is also right about who is missing it.

The open question is whether the restructuring can outrun its own friction. An economy adding jobs faster than households can absorb price increases, recruiting entry-level workers a benefits cliff forbids from accepting, and routing every hotel, plant and startup through a permitting counter the Legislature hasn’t fixed, is growing on a lid.

The survey measures how hard employers are pushing against it. The next few quarters will measure whether anyone lifts it.

Web Editor Alex Díaz contributed to this story.