The Balearic economy closed the summer showing a strength superior to that of Spain as a whole, according to the report ‘Economic Moment of the Balearic Islands’ for the month of November and prepared by the Directorate General of Economics and Statistics. The document reveals that the turnover of the services sector tripled in August the national average growth despite the rise in prices: while in the archipelago increased by 8.3%, in the country as a whole it only increased by 2.8%.
Hotels and transport were the driving forces behind this increase, in a context in which all activities recorded positive rates, except for administrative services. At the same time, the Balearic Islands recorded the highest price increase in Spain in October – tied with Madrid – driven mainly by the hotel, café and restaurant groups, as well as by housing, with an increase of 3.6%, four tenths above the state average.
Inflation, consumption and companies
Core inflation also picked up to 3.1%, clearly above the 2.5% recorded at the national level. Even so, domestic demand showed stability, with 0.6% growth in investment and consumption during the second quarter. In addition, the creation of commercial companies increased by 3.7% up to August, although foreign investment fell by 10.3% in the first half of the year.
Record tourism value and passenger growth
Tourism was once again one of the pillars of economic dynamism. Between January and September, the Balearic Islands received
Total spending reached 20,492 million euros, up 5.5%, growing more in value than in volume. Spending per person stood at 1,232 euros (+3.1%), and daily spending reached 201 euros (+5.2%).
In the third quarter, air passenger traffic remained stable in Menorca, while it increased in Mallorca and Ibiza. Overall, Balearic airports handled 19.9 million passengers through September, 1.4% more than a year earlier.
Construction accelerates and sets record highs since 2008
The construction sector also showed an expansive behavior. With 3,375 homes approved, the Balearic Islands reached the maximum since 2008, with an increase of 11.9% in the last year and 33.7% accumulated growth up to September. For the Government, this trend anticipates “a strong momentum in the sector”.
Industry and employment are also advancing
In terms of industry, the Balearic Islands recorded one of the highest increases in production in Spain, with an increase of 5.2% up to September, well above the national figure of 1.1%. The increase was supported by capital goods and consumer durables.
The labor market continued to show vigor. Social Security enrollment grew by 2.7% in October, to 605,034, with services (+2.7%) and construction (+2.6%) as the main drivers. Industry also advanced (+1.8%), while agriculture remained stable.
The report thus states that, despite inflationary pressure and the fall in foreign investment, the Balearic Islands maintains a higher growth rate than the country as a whole, supported by tourism, domestic consumption, construction and industry. Do you want me to prepare a headline and a downgrade as well?
