According to the Statistical Institute of Catalonia (Idescat), Catalonia’s GDP grew by 2.0% year-on-year in the second quarter of 2019, the same rate as in the previous quarter. The continuing growth of the Catalan economy was mainly due to growth in exports (3.1%), which offset a slowdown in growth of domestic demand (1.5%, down from 1.9% in Q1).
The evolution of the Catalan economy in the second quarter puts Catalan GDP growth 0.3 percentage points below that of the Spanish economy (2.3%) and 0.6 percentage points above the rate for the EU-28 (1.4%). Quarter-on-quarter GDP growth in Catalonia (0.5%) was down 0.1 percentage points from the previous quarter and was the same as the rate for Spain as a whole. This was 0.3 percentage points higher than in the EU-28 (0.2%).
For the second consecutive quarter, there was a decline in the growth rate of domestic demand, from 1.9% to 1.5%. This overall decline is the net result of quite distinct dynamics in the components of domestic demand. Growth in household consumption was the same as in the previous quarter (1.4%), though within a general trend towards moderation since the second half of 2018. Consumption by public administrations also continued to grow at a fairly steady rate (2.3%, up 0.1 percentage points from Q1). In contrast, the growth rate of gross capital formation fell sharply, from 3.2% in the first quarter to 1.0% in the second. This trend is explained by a marked reduction in investment in capital goods, from 4.0% in the first quarter to -0.6% in the second. Investment in construction continued to grow at a rate of 3.4%.
In the foreign sector, there was a notable recovery of exports, which grew at a rate of 3.1%, in sharp contrast to the negative growth recorded in the previous quarter (-1.6%). This result is due to growth in exports of goods and services (3.0%) and an increase in consumption by foreigners in Catalonia (3.7%). The growth rate for the latter component remained quite steady over the first six months of the year. Imports of goods and services contracted by 0.2%, in contrast to modest growth in the previous quarter (0.7%). Consumption by the population residing abroad increased significantly in the second quarter (7.2%), though this result extends a continuing slowdown that began in early 2018.
From of supply perspective, the most significant result is the trend in large sectors. Activity in industry and construction gained ground, whereas there was a drop in the growth rate for services.
The growth rate for industry remained negative (-0.6%), though this represents an improvement on results for recent quarters. Industrial production indicators show negative growth in the most significant branches of manufacturing, ranging from -1.7% in the food industry to -8.0% in the manufacture of transport material. These results contrast with growth in electric power (4.9%) and water supply (11.7%).
The growth rate in the construction sector remained strong, at 4.9%, 0.3 percentage points higher than in the previous quarter. Services maintained a growth rate of 2.7%, underpinned mainly by the strong performance of real estate, professional and other activities (3.4%). The added value of commercial, transport and hospitality activities showed a moderate increase of 1.9%, 0.3 percentage points lower than in the previous quarter. Branches of the public administration, education, health and social services grew at a rate of 2.6%, the same as in the previous quarter.
Finally, the agricultural sector showed negative growth (-2.5%), continuing a slowdown that began in the third quarter of 2018.