Government admits job market will remain tough in 2011

PALMA
THE Balearics may be on course to finally emerge from recession in the coming year but, Finance Minister Carles Manera, who only last week announced an end to the economic crisis, was yesterday forced to admit that while the economy is forecast to grow in 2011, the government believes it is going to be very difficult for the unemployment situation to improve.

Union bosses are warning that as many as 125'000 people could be spending Christmas out of work here in the Balearics, 25'000 more than last year and the government yesterday projected another tough year for the jobless in 2011.

Manera said that local economy is forecast to grow by 0.7 percent and should drag the Balearics out of the recession.
But, according to the Director General for the Economy, Andreu Sanso, economic growth of two percent or more is required to fuel job creation.
Manera was, however, quick to underline that the region's GNP has been showing positive signs in some sectors, in particular the service sector which reported a near ten percent increase in revenue during the second quarter of this year and a two percent growth in employment.

But, for the rate of unemployment to be reduced significantly, all sectors need to show an upturn in business.
The Minister for Finance said that the service sectors had been the driving force behind the local economy for much of this year and is confident that there will be further improvement in the coming year and perhaps, the economy will grow by more than the current predicted 0.7 percent.

Manera said that the region's three key tourism markets, the UK, Germany and the mainland, are all forecasting healthy economic growth figures for the coming year and that should benefit the region's tourist industry.

As the Bulletin reported last month, Balearic bookings for summer 2011 are already 20 percent up on this time last year and the government's spending cuts are not expected to hit the holiday market too much.

Manera appears to be of the opinion that the worst is over claiming that the Balearic economy bottomed out last year and has since been showing gentle but gradual signs of improvement.

What is going to make a significant difference to the end of year figures is the strong second half the tourist industry has enjoyed.
The later half of the peak season figures for the hotel occupancy and tourism spending outstripped the rest of Spain and the Autumn tourism figures are also some of the best in the country with Majorca operating a substantial winter programme with the UK this year.