Page 93 - Economic report 2018

momentum of the industrial recovery in the last months of 2018. This low rate of activity can
be partly linked to still undynamic domestic demand and also a slight fall in the export rate
of businesses (total exports of goods fell 4.3% year on year in the last six months of 2018,
contrasting with the 23.8% increase in 2017). In this context of low activity, recruitment fell in
the sector, following a quite stable trend in most businesses. As for prices, businesses indicate
that sales prices are being maintained to encourage demand.

In relation to the first half of 2019, businesses’ The forecasts for industry indicate a slight
forecasts are for a slight improvement in improvement in the first half of 2019.
business activity and a very limited increase in
orders and production volumes. The average
productive capacity utilisation will remain at current levels (around 73%) and sales prices
and employment will follow a slightly rising trend. The indicator of industrial climate, which
measures businesspeople’s confidence level, is still very low, despite showing some improvement
compared with the previous two half years. This would suggest a very gentle recovery in the
industrial sector over the next few months.

Chart 10.3
CONFIDENCE INDICATOR - INDUSTRIAL SECTOR
(1)

91

(1) Average balances in the total order book, production trend and stocks of finished products turned around.
Source: Chamber of Commerce, Industry and Services of Andorra.

As for the obstacles that limit business activity, apart from weak demand (mentioned by 40% of
businesses, the lowest percentage since 2004) and increased competition (quoted by 28%), the
other most significant concerns focussed on the shortage of qualified workers and increased
operating costs, both factors indicated by 24% of total surveyed businesses.

XI. Construction and related industries The Andorran economy: developments in the main sectors | XI. Construction and related industries

In 2018, the rising trend in the construction Construction saw strong
and related industries sector was consolidated,
at a very notable rate of expansion and ever growth in 2018.
stronger profile. According to the official GDP
figures published by the Government, construction GVA in 2018 saw a variation of 5.8%, higher
than the 4.2% achieved in 2017, the fourth consecutive year of positive rates after a long, intense
period of recession. Due to this trend, construction’s share of total GVA began to recover and
already represents 6.2% in 2018, although it is still far from the high of 12.6% it achieved in 2006.