The economy of Tenerife maintains its “dynamism” of growth in the second quarter of the year thanks to the boost in tourism, which drags down the rest of the sectors, and record figures in employment with the best data since 2008. This is the main conclusion of the Chamber of Commerce report on the economic situation between April and June, presented yesterday at the Cabildo. Despite the favorable wind, experts warn of the risk of a “slight slowdown” for next winter season due to factors such as inflation, which makes prices rise, and a rise in interest rates, which would affect both domestic and domestic consumption. of the visitor source markets, especially the United Kingdom and Germany.
Public-private collaboration is key to anticipating a less expansive economic scenario through policies that promote investment and employment on the Island. Without forgetting the path to the much-touted and never achieved economic diversification with industry and technological innovation as possible new niches of wealth and, therefore, of work.
The president of the Cabildo de Tenerife, Rosa Davila, and the head of the provincial Chamber of Commerce, Santiago Sesé, presented the results for the second quarter of the year. They were accompanied by the insular vice president, José Miguel Ruano; the Minister of Industry, Commerce, Primary Sector and Animal Welfare, Manuel Fernandezand the general director of the entity, Lola Pérez.
This report, prepared by the Chamber’s Research Service with the sponsorship of the Cabildo de Tenerife, shows how the island’s economic activity, despite moderating compared to the first quarter of the year for seasonal reasons, has been able to maintain growth in terms year-on-year, notwithstanding marking a trend of a certain deceleration in the rate of progress.
tourism and employment
Lola Pérez broke down the data. She outlined that Tenerife was at a maximum in terms of tourist activity, accounting for 1,492,750 visitors, both national (228,000) and foreign (1,240,000) in the second quarter of the year, 7.2% more than a year ago. She thus exceeded the average growth of Canary Islands, which in this same period increased by 5.5%. During the first six months of 2023, the Island welcomed 3,212,296 tourists, 14.9% more than in the first half of 2022. In this area, it should be noted that German tourism has suffered, unlike the British , and that has harmed other destinations to benefit Tenerife. There are also good results in different indicators of local demand such as the sale of passenger cars, which grows 2% compared to the first quarter of 2023 and 20% compared to the second of last year. From April to June 2023, 6,423 passenger cars were registered on the Island, 124 more than at the start of the year and 10,056 more than year-on-year. Companies registered with Social Security also increased, 340 more than a year ago (1.3%), an index, once again, higher than the average increase for the Archipelago, of 0.9%.
The positive data also translates into the labor market. The closing of the second quarter of the year registered a record number of occupation, with a total of 424,500 workers according to the latest Active Population Survey (EPA). This data represents 6.9% more than in the first quarter of the year, and 5% when compared to the period from April to June 2022. The evolution of unemployment in this same period is also positive, with a drop of 13,580 (-14.6%) unemployed in the quarter, data that in annual terms is 5,300 fewer unemployed, 6.3% below the number of unemployed a year ago.
The EPA reflects that in Tenerife there are currently 79,400 unemployed, which is equivalent to a number slightly above 15%, a figure not reached since 2008. All sectors improved with the drag of tourism, especially construction and services.
Intangible
Business confidence grew by 0.8% in Tenerife. The economic forecasts for the coming months are moderately optimistic and, thus, optimistic, 80% of the businessmen surveyed state. The commercial sector, for example, “has not stopped growing since 2021.” But there are dark clouds on the horizon. Among them, the progressive rises in interest rates that will test the capacity for consumption and the maintenance of the growth rate of the last two years. However, lower inflationary pressure is expected, although the decline will continue slowly. A negative piece of data is the number of companies that “does not rebound, despite the improvement in consumption” because there are 76 fewer than a year ago. In investments there is a “certain slowdown”.
challenges
Santiago Sesé listed six pending challenges for the advancement of the economy. From the fragility of energy systems to the deficit in hydraulic infrastructures, including mobility on the Island, pending improvements in ports and airports and the need to bet on innovation and match the supply of companies with the demand for work.
Rosa Dávila agreed on the need to correct the deficit in infrastructure that the Island has as a starting point to increase its competitiveness. She announced a meeting at the beginning of September in Madrid with AENA “to go hand in hand in the reform projects of the two airports.” The president herself maintained the approach of carrying out “in 90 days” measures with which to mitigate traffic queues “hand in hand with all social and economic agents.” She guaranteed: “We are not going to look the other way or lower our arms.” For her Dávila, “all these circumstances hinder our economic development and we need tools that allow us to guarantee the well-being of those who live here.”
Diversification
Manuel Fernández valued the positive dynamics in the economic sectors. He made special mention of the primary, with the increase of 11% annually between January and May of banana exports. He also to the industrialist as a “generator of stable and qualified employment”, with the creation of a specific council. In this sense, he highlighted the commitment of the Cabildo “for economic diversification.”
Collaboration
José Miguel Ruano highlighted the importance of public-private collaboration for the maintenance of the welfare state in Tenerife. Within this framework, he focused the relationship with the Chamber of Commerce, pending the regulatory development of the 2019 Chambers Law “to continue strengthening its role in job placement and the promotion of innovation, digitalization and Vocational Training”.
The economic forecasts for the coming months are moderately optimistic. Precisely in this way, optimistically, 80% of the surveyed businessmen manifest themselves.
The Active Population Survey (EPA) reflects that on the Island of Tenerife there are 79,400 unemployed, slightly above 15%, a figure not reached since 2008.
In the island’s industrial sector, 67,000 people work, directly and indirectly, through 1,306 companies registered with Social Security with dependent employees.
