SANTA CRUZ DE TENERIFE, 26 Apr. (EUROPE PRESS) –
The confidence of the Canarian business community moderates after having reaped excellent results in the first months of the year and the economic growth of the Islands begins to stabilize after a year of strong recovery stimulated by the recovery of the tourism sector, according to the latest survey of the Indicator of Business Trust in the Canary Islands, carried out in April at 840 establishments belonging to five sectors of activity and with the participation of all company sizes.
This indicator, which takes into account the results of the companies in the first quarter of the year and the forecasts for the second, barely varies and shows a slight decrease that, from the Chamber of Commerce of Santa Cruz de Tenerife “is not valued as negative taking into account that the moment in which the survey was carried out is highly conditioned by the change in a period of great importance for the economy of the Islands, such as the first quarter of the year, and that it passes to a less dynamic moment from the point of view of tourist and commercial view”, indicated the president of the chamber institution, Santiago Sesé.
“The economy of the Archipelago -continues Sesé– will continue to show a positive tone throughout the year although with a tendency to slow down. From the Chamber we maintain an estimate of growth of the Canary Islands economy for the whole of the year 2023 of 3%” . Throughout the year, employment growth is expected to slow down, which will tend to stabilize, as can be seen from the survey, which indicates that 80% of employers will maintain their workforces for the second quarter of the year.
Likewise, the prices that will continue to rise, but will show moderation trends: 65.2% of the businessmen surveyed consider that they will not change their prices, while 22.7% estimate that they will make increases and 12.1% expect to be able to lower them in the second quarter compared to the first quarter. “It will be from now on when we will be able to assess the resilience of our economy in the face of the current inflationary situation and its consequences.”
The start of the year 2023, marked by the recovery of a tourist season free of restrictions after the pandemic, was accompanied by an excellent performance of employment, which translated into a very positive period for business activity as a whole. This led to 28.5% of the companies surveyed having declared an improvement in their results in the first quarter of this year compared to the fourth of 2022. A percentage that, in the case of transport and hospitality companies, is still more pronounced and reaches 53%.
Looking ahead to the second quarter of 2023, forecasts point to stable results, with 60% of responses indicating that they hope to maintain the same results as in the first quarter of the year. For their part, the percentage of companies that anticipate a reduction in their business volume is not growing, with a greater number of optimistic companies (22.5%) than pessimistic ones (17.5%).
Among the factors that motivate these results in the confidence of companies are the tourist forecasts both for the summer and for the next winter, motivated by an increase in connectivity that anticipates good tourist records for the second half of 2023. All of this in a scenario where, up to now, consumption has maintained a favorable behavior, and in which expectations of economic diversification are beginning to emerge in sectors such as energy, audiovisuals or technology, among others.
However, the Chamber of Commerce also highlights a series of uncertainties and problems that can break the confidence of Canarian companies and condition the economic future of the Islands. “In the first place, it will be necessary to observe the direct impact that inflation and interest rate rises can have not only on consumption, but also on the operating costs of companies, on their investment capacity or on compliance with its financial obligations.
“The bottlenecks due to lack of supplies that continue to occur in some sectors such as the automotive, construction or primary sectors due to the drought will also continue to affect the economic future. The shortage of personnel will continue to be a limitation for economic activity, preventing not only its capacity for growth, but also putting at risk, on many occasions, the quality of the services provided.
Finally, the delay in the resolution of urban files when starting any activity or the current legal uncertainty are also two challenges to overcome to facilitate foreign investment or the implementation of structuring projects for our economy” , concludes the chamber president.
THE ICE BY SECTORS AND ISLANDS
Studying the data from the latest Business Confidence Indicator survey, we see how the greatest advance in business confidence occurs in the Transport and Hospitality sector with 2.3%, well ahead of the growth produced in construction and industry (0.2% in both cases). For their part, the two sectors that saw their level of confidence drop are commerce (-0.2%) as a result of the end of the sales season and the winter season, and the activities grouped in the “Other services” sector. ” (-2.2%), where the majority of predominant responses point towards stability.
Analyzing the behavior of this indicator by islands we obtain disparate results. On the one hand, Tenerife and Fuerteventura see an increase in the confidence of their companies (0.4% on both islands), but they remain far behind the main increase registered in this period and that La Gomera stars with 2%. The decreases, for their part, occurred in Lanzarote (-0.1%), Gran Canaria (-0.5%) and La Palma (-1.6%), and which are also far from the significant decline that El Hierro with -3.8%.
