The Salvadoran economy is experiencing an impressive period of growth, with a 3% increase in Gross Domestic Product (GDP) in the second quarter of the year. This economic dynamism has translated into a notable rise in the number of formal jobs recorded by the Salvadoran Social Security Institute (ISSS).
According to a report presented by the Central Reserve Bank (BCR), which cites ISSS data, there has been a year-on-year growth of 3.8% in the number of formal jobs reported until May. This equates to an increase of 35,975 contributing workers compared to the same period in the previous year.
Douglas Rodríguez, Head of the BCR, highlighted the significance of these figures, stating, «Formal employment has grown by 3.8% as of May 2023, according to the ISSS, whereas previously, it grew by less than 1%.» With this increase, the number of people enrolled in the social security system has risen to 970,604.
Breaking down the data, the public sector recorded a 2% increase, with 3,931 more contributors, representing 20.3% of the total workforce. However, the most substantial growth was seen in the private sector, with a 4.3% increase (31,864 more contributors), accounting for 79.7% of total formal employment.
Additionally, Rodríguez noted that the growth in employment rates has resulted in an increase in the average monthly salaries across various economic sectors. For instance, the real estate sector experienced a 10.4% salary increase, raising the average from $655 in 2022 to $723 in 2023. In the construction sector, salaries grew by 6%, reaching an average of $571.
Furthermore, professional services saw a 5.8% salary increase, while the communications sector experienced a 4.1% growth, the industry sector saw a 3.9% increase, and the financial sector reported a 3.5% rise in salaries.
Construction Leads the Way
The construction industry’s boom has had a multiplier effect on related activities such as professional energy and architecture services, as well as supply chains associated with construction materials.
This sector has witnessed the most substantial growth in activities contributing to GDP and has generated the highest number of new formal jobs. According to ISSS data, construction saw a 26.4% growth in contributors (6,653 more), totaling 31,856 workers. Additionally, real estate activities grew by 12.5%, adding 857 more workers compared to the previous year, while information and communications saw an increase of 1,349 employees.
In other sectors, trade, transportation, hotels, and restaurants contributed 15,991 more contributors (a 7.4% growth) for a total of 238,716 workers, and personal services recorded a 6.4% year-on-year increase, with 4,595 more Salvadorans enrolled in formal employment.
The robust growth in formal employment and the impressive performance of the construction sector are promising signs for El Salvador’s economy, indicating a positive trend towards increased economic stability and prosperity for its citizens.