Unicaja Banco has published the issue number 8 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 estimates of Grupo Unicaja Banco’s research company point to a growth in the GDP in all the Andalusian provinces during 2021, at rates ranging from 3.9% in Jaen to 5.3% in Almeria, with growth estimations over the regional average (4.8%) in Malaga (5.2%), Cadiz (5.0%) and Seville (4.9%).
The forecasts for 2022 point to a GDP growth of over 4.0% in all provinces, with growths, ranging from 4.2% in Jaen to 6.3% in Malaga.
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 12 January.
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 and the forecasts for 2022.
Provincial analysis: recent evolution of the main economic indicators
According to the estimates of Analistas Económicos de Andalucía, in the third quarter of 2021, the economic activity would have recorded a general growth compared to the same period of 2020. The GDP increase would have exceeded the regional average (3.1%) in Almeria (4.0%) and Malaga (3.9%) and would be similar to the Andalusian average in Cadiz (3.0%) and Huelva (3.0%).
With regard to employment, according to the figures published by the Labour Force Survey (Encuesta de Población Activa, EPA), in the third quarter of 2021 the number of those in employment fell by 7,200 people compared to the previous quarter. Employment increased in Cadiz (24,600), Jaen (9,700), Malaga (8,700), Almeria (7,300), Granada (2,400) and Cordoba (2,200), and it decreased in Huelva (-40,900) and Seville (-21,200).
In year-on-year terms, the occupied population has increased by 162,200 people in Andalusia, involving an 5.4% growth (4.5% in Spain). By provinces, the growth has been general in all provinces but Huelva (-3,6%), with significant increases in Grada (12.0%) and Almeria (10.6%). Compared with the third quarter of 2019, employment grows in six provinces, with the exceptions of Huelva (-7.8%) and Seville (-2.2%). 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. Overnight stays in Andalusia have increased in the period between January and October 2021 by 61.4% compared to the same period of 2020, registering a general growth in all provinces. The rise in Almeria (89.4%), Malaga (79.0%), Cadiz (69.6%) and Huelva (67.9%) are to be remarked. However, when compared to the same period in 2019, hotel demand continues to be lower in all provinces, both in national and international travelers.
Regarding residential activity, a recovery in demand is seen, with home sales and purchases in Andalusia between January and September 2021 exceeding the numbers of the same period in 2020 (44.2%) and also in 2019 (15.0%), before the outbreak of the pandemic. The growth of sales and purchases has been general in all provinces with respect to the same period in 2020, with the highest year-on-year growth rates in Huelva, Almeria and Cadiz, with variation rates above 50%. In relation to 2019, all Andalusian provinces have recovered pre-pandemic levels.
As for foreign demand, exports of goods also show a positive evolution in the year, with the value exported by Andalusia growing by 22.4% compared to the period January-September 2020, and also exceeding the value of exports in the same period of 2019 (4.2%). With respect to 2020, the increase by provinces is general, especially remarkable in Huelva (45.6%), Cadiz (30.3%) and Cordoba (27.7%). In comparison with the aggregate January-September 2019, the increase is general too, except in Sevilla and Jaen, and with the increases in Cordoba, Almeria and Granada to be highlighted.
In this context, for the whole 2021, the estimates made by Analistas Económicos de Andalucía indicate a growth in the activity in all provinces. Growth rates would have exceed the regional average (4.8%) in Almeria (5.3%), Malaga (5.2%), Cadiz (5.0%) and Seville (4.9%).
The forecasts for 2022 point to a general growth in production, stronger than in 2021, with rates over 4.0% in all provinces, ranging from 4.2% in Jaen to 6.3%, and above the regional average (5.5%) in Granada (5.8%) and Cadiz (5.7%).
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 12 January.
According to the OECD’s latest report, the economic activity continues to recover at a global level, reaching pre-pandemic levels. However, the recovery is uneven by large geographical areas. In the last months of 2021, the productive and commercial activity has lost momentum due, mainly, to the surge of the omicron variant and to the imbalances arising from tension in global production chains, as well as to the rise in prices of raw materials and intermediate goods. The OECD estimates that, for the whole 2021, the global economy will have grown by 5.6% and by 4.5% in 2022.
In this context, in the specific case of the Spanish economy, the latest data from the Quarterly National Accounts, corresponding to the third quarter of 2021, indicate that the Spanish GDP registered a variation of 2.6% (0.6 p.p.) compared to the previous quarter. This rate is higher than the preliminary figure estimated on October, placing the year-on-year GDP variation at 3.4%.
The moderation in the economic activity in the fourth quarter of the year, compared to the previous months, has made the main international bodies and national research services to make a downwards review of their growth outlooks. The latest macroeconomic projections of the Bank of Spain indicate that the GDP in 2021 could have grown by 4.5%, and that the recovery could accelerate in 2022 to reach 5.4%.
With regard to the Andalusian economy, and as included in the report of 12 January, according to the latest data from the Quarterly Regional Accounts of Andalusia, published by Instituto de Estadística y Cartografía de Andalucía (IECA), in the third quarter of 2021, the GDP has grown by 1.5% (0.2 p.p. less than in the previous quarter). Compared to the third quarter of 2020, the GDP has grown by 3.1%.
The contribution to the internal demand has been of 1.8 p.p. In y-o-y terms, household consumption has increased by 1.0% and government consumption, by 5.4%, whereas investment has fallen by 1.7%. The external sector made a positive contribution of 1.3 p.p., with higher increase in exports (16.7%) than in exports (10.8%).
On the supply side, the GDP growth responds to the increase in the services sector (5.9% year-on-year), as both agriculture and construction and industry have registered a drop in their activity levels. Within the services sectors, there has been a general rise by branches, at rates ranging from 0.4% in professional activities to 12.5% in retail, transport and hospitality.
The forecasts of Analistas Económicos de Andalucía indicate that in 2021, the Andalusian GDP could have grown by 4.8%. With regard to demand, household consumption and investment would post a growth of 5.9% and 3.0% respectively, whereas, on the supply side, a general increase is expected, except in the agricultural sector (-1.2%), and especially remarkable in services (5.8%), as indicated in the recently published report ‘Previsiones Económicas de Andalucía’. As for employment, the number of people in employment is estimated to have grown by 3.4% in the year average, with the unemployment rate standing at 22.1%, 0.2 p.p. lower than the 2020 average.
In 2022, the Andalusian economy is expected to intensify its growth rate, reaching 5.5%, in a context of high uncertainty because of factors such as the new virus variants, bottlenecks in production chains or the increase in prices and costs. Private consumption and investment could grow at a higher rate than in 2021, at 6.2% and 7.0% respectively.
Additionally, the increase will be general in all the sectors, with higher rates for services (6.1%) and construction (5.1%). The number of people in employment is expected to grow by 2.4% in the year average for 2022, and the unemployment rate would stand at 21.0%.