The Canary Islands’ economy continues to show strength. 30% of island entrepreneurs plan to expand their workforce in the next quarter, compared to 15% expecting to downsize. The remaining 55% predict they will maintain the same number of employees. These figures were reported yesterday by the Chamber of Commerce of Tenerife based on a survey of 900 companies in collaboration with the Canary Islands Institute of Statistics (Istac). It was also highlighted that the business confidence indicator – measuring entrepreneurs’ optimism about their prospects in the second quarter of the year – has increased by 0.3% in the first quarter, although it remains below the national average, where this indicator has risen by 1.5%.
Although Canary Islands is the region with the lowest growth, Santiago Sesé – Chamber’s president – and Lola Pérez – institution’s director – pointed out that the slowdown in the Canary Islands’ economy is due to a “stabilisation” after months of historic growth driven by the tourism sector. In fact, the strength of tourism continues to act as a catalyst for other sectors, a trend observed with the successful end-of-season sales in the first quarter of the year. During this period, visitors boosted sales both during the Epiphany holiday and the sales season.
Tourism remains the main driver for other sectors, particularly commerce
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Regarding tourism expectations for the upcoming months, as the sector transitions out of its peak season – winter – prospects are “good”. This is evidenced by reservations, which are slightly higher than the same period last year. Optimism will be maintained as long as there are no “geopolitical events”.
Amid a climate of “discontent” regarding the Canary Islands’ economic model, institution representatives expressed that it is time to “seek solutions” rather than assigning blame. Regarding proposals such as the implementation of an eco-tax, the business community expressed being “open” to its introduction as long as “what will be charged and where the funds will go” are clearly defined, calling for discussions to establish its specifics. What they are not in favour of is imposing a lodging tax. “Increasing the tax burden could put us at a disadvantage compared to Morocco, and let’s remember that our destination succeeds only if it remains competitive,” they noted.
Emphasising that dialogue is “essential” in all cases, as implementing non-consensual measures could cross a line, that of “legal certainty”, and this could “scare off” investors.
In this regard, they recalled that some of the demands made by demonstrators on Saturday, the 20th of April, in the Canary Islands are requests that the Chamber has been advocating for years, such as building more public housing, controlling wastewater discharges into the sea, promoting renewable energy, or regulating holiday rentals.
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Construction companies are the most positive, with their confidence for the next quarter rising by 3.3%
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Due to the housing shortage in the archipelago, construction has become pivotal in the economy and is the sector with the highest business confidence; its index is expected to increase by 3.3% for the next quarter. 63% of companies in the sector anticipate maintaining their activity in the second quarter of the year.
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