Unicaja Banco has published the issue number 7 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, the estimate of Grupo Unicaja Banco’s research company point to a growth in the GDP in all the Andalusian provinces during 2021.
More specifically, all the Andalusian provinces will post a GDP growth of over 4.0%, ranging from 4.4% in Huelva to 6.9% in Malaga, with growth estimations over the regional average (6.2%) in Cadiz and Sevilla (see chart on page 3).
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 28 October.
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 the second quarter of 2021 and the whole year.
Provincial analysis: recent evolution of the main economic indicators
According to the estimate of Analistas Económicos de Andalucía, in the second quarter of 2021, the economic activity would have recorded a general growth compared to the second quarter of 2020, the period that was most affected by the pandemic. The GDP increase would have exceeded the regional average (18.2%) in Huelva (18.6%), Almeria (18.5%), Cadiz (18.4%) and Cordoba (18.3%).
With regard to employment, according to the figures published by the Labour Force Survey (Encuesta de Población Activa, EPA), in the second quarter of 2021 the number of those in employment grew by 102,400 people compared to the previous quarter. Employment increased in Cadiz, Granada, Huelva, Malaga and Sevilla. The significant increases registered in Sevilla (39,800 people, largely related to the growth in the services sector), Malaga (37,600 people, mainly in the construction sector) and Huelva (31,800 people, related to the agricultural sector) are to be highlighted.
In year-on-year terms, the occupied population has decreased by 245,700 people in Andalusia, involving an 8.4% growth (5.7% in Spain). By provinces, the growth has been general, but the increases in Granada (14.9%) and Jaen (10.5%) are to be remarked. The figures of those in employment in Granada, Cordoba, Huelva and Sevilla are higher than those of the second quarter of 2019, as it happens in Andalusia as a whole. However, it must be noted that the employment figures include those workers under furlough schemes (ERTE).
With regard to activity by sector, data from the Hotel Occupancy Survey of the National Statistics Institute show a recovery in demand in the summer months compared to July-August 2020. Overnight stays in Andalusia have increased in these months by about 90%, registering a general growth in all provinces, more prominent in Malaga, Sevilla and Almeria, where overnight stays have doubled compared to the summer months of last year. However, when compared to the same period in 2019, hotel demand continues to be lower in all provinces. By nationality of travelers, while foreign demand has decreased in all provinces compared to July and August 2019, national demand has increased in Malaga, Cadiz, Huelva, Sevilla and Jaen.
Regarding residential activity, a recovery in demand is seen, with home sales and purchases in Andalusia between January and July exceeding the numbers of the same period in 2020 (39.4%) and also in 2019 (5.9%), before the outbreak of the pandemic, with practically a general growth in all provinces.
As for foreign demand, exports of goods also show a positive evolution in the year, with the value exported by Andalusia growing by 18.2% compared to the period January-July 2020, and also exceeding the value of exports in the same period of 2019 (0.3%). With respect to 2020, the increase by provinces is general, with rates above 30% in Huelva and Cordoba. In comparison with the prepandemic figures, the exported value has increased in Almeria, Cordoba, Granada, Huelva and Malaga, with rates above 10% in the first two provinces.
For the whole 2021, the estimates made by Analistas Económicos de Andalucía indicate a growth in the activity in all provinces. Growth rates could exceed the regional average (6.2%) in Malaga (6.9%), Cadiz (6.6%) and Sevilla (6.3%), whereas Granada could grow at a rate similar to that of Andalusia.
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 28 October.
The economic activity continues to recover at a global scale. According to the OECD’s latest report, the global economy is expected to grow by 5.7% this year and by 4.5% in 2022.
The increase in demand has pushed up prices in commodities and food, whereas the disruption to supply chains has added to cost pressures, resulting in inflationary pressures that should eventually fade.
The projections made by the different international bodies indicate that the Spanish economy will be among those with a highest growth in 2021. The Bank of Spain, in its latest projections, expects for this year a GDP growth of 6.3%, and of 5.9% in 2022, an upwards review of 0.1 p.p. However, the National Statistics Institute (INE) has revised downwards the growth in the second quarter, from the 2.8% published in the end of July advance, to 1.1% in September, which will have an effect on the growth projections made before this publication.
With regard to the Andalusian economy, and as included in the report of 28 October, according to the latest data from the Quarterly Regional Accounts of Andalusia, published by Instituto de Estadística y Cartografía de Andalucía (IECA), in the second quarter of 2021, the GDP has grown by 3.6% (0.4% decline in the first quarter). Compared to the second quarter of 2020, the GDP has grown by 18.2%, although production remains 5.7% below the figure of the fourth quarter of 2019 (-8.4% in Spain).
The contribution of the internal demand has been 21.2 p.p., compared to -2.3 p.p. in the previous quarter. In y-o-y terms, household consumption has increased by 28.6% and investment has grown by 15.3%.
On the supply side, there has been a general increase, with the exception of the agricultural sector (-0.5% y-o-y). The growth rates range from 5.4% in financial and insurance activities to 52.2% in trade, transport, accommodation and restaurants, with growths also over 20% in industry, professional activities and art, entertainment and other services.
In relation to the growth forecasts for Andalusia, Analistas Económicos de Andalucía estimates that in 2021, the regional GDP will grow by 6.2%, 0.3 p.p. more than in June forecast, due to the higher than expected growth in the second quarter. Private consumption and investment would post a growth of 9.1% and 6.2% respectively, whereas a general increase is expected in all sectors, except in agriculture, as indicated in the recently published report ‘Previsiones Económicas de Andalucía’.
As for employment, the number of people in employment is estimated to grow by 2.7% in the year average, placing the unemployment rate at 22.3%. With regard to growth projections for 2022, the estimates reflect that the Andalusian GDP could grow by 6.0% and employment could increase by nearly 2%.