San Juan

San Juan operates as Puerto Rico's economic apex—the capital municipality that anchors a metro area representing roughly 75% of the island's economy. With approximately 2 million residents in the San Juan-Caguas metropolitan region, this concentration mirrors capital-city dominance patterns seen in island nations worldwide: limited land area forces economic activity into a single viable hub where infrastructure, talent, and capital accumulate.

The city demonstrates multi-niche economic architecture. Tourism grew year-over-year for four consecutive years, with 2024 setting records and 2025 tracking similarly. Short-term rental demand surged 28% in 2025 while cruise traffic approaches 1.7 million passengers—expected to surpass pre-pandemic levels by 2026. Simultaneously, pharmaceutical and medical device manufacturing remains a pillar, with new investments exploiting tariff-driven reshoring opportunities. The US territory status creates unique advantage: domestic access to American markets without some mainland regulatory complexities, making Puerto Rico a nearshoring destination.

San Juan's harbor—one of the Caribbean's largest natural ports—positions the municipality for logistics expansion alongside Ponce's ongoing port development. Federal reconstruction funds following hurricane damage, combined with tax incentives (Act 60 for mainland Americans), drive private investment inflows. Yet the economy remains vulnerable to external shocks: hurricane exposure, dependence on federal policy, and population loss to the mainland. Tourism's record growth coexists with a medical manufacturing cluster that employs far fewer than its 2005 peak—a structural shift from production to services characteristic of mature island economies.