Unicaja Banco has published the issue number 5 of its quarterly report ‘Situación económica y perspectivas de las provincias de Andalucía’ (Economic Situation and Outlook of Andalusian Provinces), prepared by Analistas Económicos de Andalucía. According to the report and on the basis of the first estimates of the Annual Provincial Accounts of Andalusia, published by Instituto de Estadística y Cartografía de Andalucía (IECA), the GDP of Andalusian provinces in 2020 has registered a general drop.
For 2021, the estimations made by Grupo Unicaja Banco’s research company suggest that in the baseline scenario, all the Andalusian provinces will post a GDP growth of over 3.9%, ranging from 3.9% in Huelva to 7.3% in Malaga. In the worst-case scenario, the increase would remain below 4.5% in all the provinces.
This report focuses on the analysis of the evolution and economic outlook of each one of the Andalusia provinces, and it supplements the regional economic forecast report published on 15 April.
The report is divided into two sections: the first one describes the international and national economic backdrop and it includes the main features of the recent behavior of the Andalusian economy. And secondly, a comparative of the main indicators of the eight Andalusian provinces is made. This section includes Analistas Económicos de Andalucía outlooks on the evolution of the Gross Domestic Product (GDP) for 2021.
Provincial analysis: recent evolution of the main economic indicators
According to the estimations of Analistas Económicos de Andalucía, in the fourth quarter of 2020¸the economic activity would have dropped in all Andalusian provinces. The decline would have exceeded the regional average (8.7%) in Malaga (-12.8%) and Cadiz (-9.4%), remaining in line with the Andalusian average in Granada (-8.8%).
The first estimations of the Annual Provincial Accounts of Andalusia published by IECA show a general GDP decrease in 2020, exceeding the regional average (-10.3%) in Malaga (-14.0%) and Cadiz (-10.7%), provinces where tourism and hospitality are more relevant. However, in those provinces with a higher weight of the agricultural sector –with a participation of the primary sector in the provincial Gross Added Value above 10%-, the decrease would have been lower, such as in Almeria (-9.3%), Huelva (-7.8%), Jaen (-8.0%) or Cordoba (-8.0%).
With regard to employment, according to the figures published by the Labour Force Survey (Encuesta de Población Activa, EPA), the number of those in employment grew in the fourth quarter of 2020 by 97,800 people compared with the previous quarter. The growths in Malaga (up 32,800 people) and Seville (22,600) are to be remarked. Employment also grew in Almeria (13,800), Jaen (15,500), Cordoba (14,400) and Granada (13,800). On the contrary, the number of those in employment fell in Cadiz (-13,400) and Huelva (-6,400). It should be noted that these employment figures include those workers affected by the furlough schemes (ERTE).
However, in year-on-year terms, the occupied population has decreased by 53,000 people in Andalusia (-1.7%, -3.1% in Spain). By provinces, there has been a decrease in employment in Huelva (-7.6%), Granada (-5.7%), Almeria (-4.0%) and Sevilla (-4.0%), whereas the number of people in employment has grown in Cadiz (2.4%), Cordoba (2.0%), Jaen (0.7%) and Malaga (0.7%).
The impact of the crisis on employment in 2020 is also reflected in the evolution of the contribution to the Social Security. In the year average, the number of people under the Social Security scheme has decreased by 2.4% in Andalusia (-2.1% in Spain), with the most significant drops in Malaga (-4.1% compared with 2019), Jaen (-3.0%), Cordoba (-2.9%) and Cadiz (-2.8%). This trend has remained during the first months of 2021, so that in February the number of people under the Social Security scheme fell by 1.4% (-2.1% in Spain), with a general drop in all provinces but Almeria and Jaen. These two provinces have recorded four months of positive year-on-year variations, due, to a large extent, to the evolution of the agricultural sector.
For 2021, the estimations made by Analistas Económicos de Andalucía indicate a growth in the activity in all provinces. In the baseline scenario, the output increase may range from range from 3.9% in Huelva to 7.3% in Malaga, also with a growth above the regional average in Granada (6.5%) and Cadiz (6.3%). In a worst-case scenario, the growth would remain below 4.9% in all provinces, with rates over the regional average (3.7%) in Malaga, Granada, Cadiz and Seville.
International, national and regional environment
The first section of the document ‘Situación económica y perspectivas de las provincias de Andalucía’ covers the international and national economic backdrop, and the main features of the recent evolution of the regional economy, information included in the report ‘Previsiones Económicas de Andalucía’, published on 15 April.
According to the OECD’s latest report, in the end of 2020 many countries experienced new virus outbreaks, resulting in new curbs to contain the pandemic, intensified in the first months of 2021. Global GDP growth is now projected to be 5.6%. World output is expected to reach pre-pandemic levels by mid-2021, if the vaccination goals are achieved and there are not emerging variants of the virus that may worsen the epidemiological situation.
The economy’s evolution shows differences between countries and sectors. In that line, services are more affected by restrictions to social interaction and mobility. Therefore, those countries with a higher weight of tourism, hospitality and leisure are suffering a stronger impact of the pandemic, as it is the case of the Spanish economy, which, according to the OECD, could grow this year by 5.7% following the upward review made, the highest among the main economies of the Eurozone.
The Bank of Spain indicates a GDP growth of 6.0% in the central scenario, with a higher activity increase in the second half of the year, underpinned by the vaccine rollout and the implementation of projects linked to the Next Generation EU funds, although part of the positive impact of the said programme would be transferred to 2022.
With regard to the Andalusian economy, as included in the report published on 15 April, the Annual Provincial Accounts of Andalusia, published by IECA, indicate that in the fourth quarter of 2020, the regional GDP grew by 0.3%, compared with 14.2% in the previous quarter, as a consequence of the worsened health situation in the end of the year, which led to the implementation of new mobility and activity restrictions. The year-on-year variation stood at -8.7% (-8.9% in Spain).
For the whole 2020, the Andalusian GDP has fallen by 10.3% according to IECA (-10.8% in Spain). The primary sector, together with financial and insurance activities and public administrations, are the only activity branches that grew last year. From the point of view of demand, there has been a general drop, except in public consumption.
In relation to the growth forecasts for Andalusia, Analistas Económicos de Andalucía estimate that in 2021, the regional GDP may grow by 5.7%, in line with the forecasts for Spain. This growth could be lower (3.7%) in a worst-case scenario, as indicated in the recently published report ‘Previsiones económicas de Andalucía’. It should be noted that uncertainty remains very high and that the evolution of the pandemic and the vaccination rollout continue to condition the economic recovery.
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