Page 87 - Economic report 2020

In contrast, if we consider the trend in industrial production, the improvement in activity is modest.
So, businesses indicated an upward trend in volumes of production in the second half of 2022,
but at a more moderate rate than in the same period of 2021, affected by rising production
costs, problems in the global supply chains – despite these waning – and weakening of the main
neighbouring economies.

In parallel, the average productive capacity utilisation continued to recover and reached 72.8%
in the second half of 2022, a value that already puts it above the levels prior to the health crisis
(70.5% on average in the period 2017-2019). However, this is still far from the historic highs of
the series (around 77%).

Finally, sales prices pursued an upward trend, due to rising costs (mainly prices of energy and
raw materials), while in the labour market, employment saw a positive trend throughout the year.

Of the factors limiting progress in business activity in the second half of 2022, the main obstacle is
the rising cost of supplies and materials, with 74% of industries indicating this. Moreover, note the
growing concern about operating costs, which has reached a record level (54% of the total), ahead
of other factors such as the shortage of qualified workers and weak demand – both mentioned by
38% of those surveyed. Finally, note that supply problems, stock shortages, transport problems
and its rising cost are still notable challenges for a significant number of industries, despite falling
in importance since the first half of the year.

The business forecasts for the first half of 2023 confirm a continued recovery in the industrial
sector but at a slower rate than expected a few months ago and also more moderate than in the
three previous half years.
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XI. Construction and related industries

The sector of construction and related industries, which represented 8.5% of GVA in 2022, has
seen a period of remarkable, sustained growth over recent years. This recovery began in 2016,
after a long period of recession, and has continued until today. Throughout this whole period
(2016-2022), the average annual growth in
GVA has been 7.8%. Due to the COVID-19
restrictions decreed in 2020, annual growth GVA IN THE CONSTRUCTION SECTOR
in the sector slowed to 1.4%, but did not fall Variation rate in real terms Chart 11.1
like in the other economic sectors. In 2021,
growth accelerated again, to 10.1%, and Andorran economy: developments in the main sectors | XI. Construction and related industries
moderated in 2022 to 7.4%, but both were
very high rates.

GVA in construction saw significant

dynamism in 2021 and 2022.

This positive trend seen by the construction
sector occurred fundamentally in the housing
segment, although public investment also grew
for the second consecutive year. Source: Department of Statistics.