Business confidence in the Canary Islands decreases

According to the National Statistics Institute (INE), he Canary Islands is the only Spain's region where business confidence decreased in 2023.

The Harmonised Business Confidence Indicator (ICEA), published by the National Statistics Institute (INE), rose by 2.7% in the second quarter of this year, its highest rise since the third quarter of 2022, when it shot up by 7.5%; while the Canary Islands is the only region, together with the Basque Country, where business confidence fell, albeit by 0.2%.

The increase in business confidence recorded for the April-June period is exclusively due to the improvement in the expectations indicator, in a context marked by the moderation of the inflation rate and higher interest rates.

Specifically, the balance of expectations (the difference between the opinions of optimistic and pessimistic businessmen) stood at +3.4 points in the second quarter of this year. This indicator had not recorded positive data since the third quarter of 2019, before the pandemic.

This is because the percentage of business establishments that think that the progress of their business will be favourable between April and June this year stood at 20.6%, its highest percentage since the third quarter of 2021.

In contrast, those who think that their business will develop unfavourably in the second quarter have fallen from 24.9% in the previous quarter to 17.2%, while the proportion of entrepreneurs who expect a “normal” evolution of their business has increased, from 60% to 62.2%.


On the other hand, the situation balance (difference between favourable and unfavourable responses compared to the previous quarter) has worsened by more than two points compared to the previous quarter, from +1.1 points in the first quarter to -1.5 points in the second quarter.

This more negative view of the current situation is the result of an increase in the number of business establishments that think that their business has developed unfavourably in the last three months and a decrease in the number of those who think that it has developed positively.

Thus, with regard to the last quarter already completed (first quarter of 2023), the ICEA shows that 19% of business establishments have a favourable opinion of how their business performed in these three months, compared with 20.5% of establishments that have seen an unfavourable evolution in this period and 60.5% that speak of normality.

These percentages were 21.1%, 20% and 58.9%, respectively, in the previous quarter. The ICEA, which is conducted quarterly and is comparable at European level, is compiled from a representative sample of business establishments.

During the second quarter of this year, business confidence rose in all economic sectors, in all company sizes, and in 15 autonomous communities.


Thus, according to the Statistics data, of the five economic sectors analysed, the one that most increased confidence in the second quarter was transport and storage (+5.9%), followed by commerce (+3.6%), industry (+3.2%), construction (+1.8%) and other services (+1.2%).

In terms of establishment size, confidence increased in all establishments. The largest gains in confidence were seen in firms with less than 10 employees (+4.6%) and in firms with 50 to 199 employees (+3.2%). In establishments with 10 to 49 employees, confidence rose by 1.6%, and in those with 200 to 999 employees and in those with 1,000 or more, by 0.3% in both cases.

By region, business confidence only fell in the Basque Country (-2.3%) and the Canary Islands (-0.2%), and rose in the remaining 15 regions, especially in the Balearic Islands (+8.3%), Aragon (+5%), Castile-La Mancha (+4.9%) and Extremadura (+3.8%). The most moderate increases in business confidence in the second quarter were in Cantabria (+1.3%), Madrid (+1.4%), Murcia (+1.8%) and Navarre, where it rose by 2.1%.

This indicator is compiled using the OECD, the German Ifo and, above all, the Japanese Tankan, which is compiled by the Japanese central bank.

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