Andorra Business Climate Survey Signals Positive Trajectory Despite Retail Slump

The 57th edition of the Business Climate Survey by the Andorra Chamber of Commerce, Industry and Services (CCIS) indicates an overall positive economic trajectory, with construction and services showing strong promise for the second half of 2025, while retail trade continues to weaken.

CCIS President Josep Maria Mas stated that the economy remains on an upward path, though certain sectors have suffered setbacks. Construction and services stand out as the most resilient areas amid these challenges.

Retail trade faces particular strain, with employment in the sector down 4.4% according to Statistics Department figures. The chamber reported a 14.3% year-on-year contraction, directly hitting business revenues. Mas attributed this to reduced spending by visitors, whose economic conditions have tightened, prompting more careful budgeting. He noted a shift in consumer habits, with money moving away from product purchases toward experiences. The rise of e-commerce has compounded the issue, as shoppers increasingly opt for online access to goods delivered quickly to their homes.

In contrast, construction sustains robust growth exceeding the broader economy's pace, marking nine and a half years of steady expansion. Activity centres on residential development, where demand for new homes remains dynamic despite rising prices. Renovation and reform projects also gain momentum. Some metrics, such as value added at basic prices (VAB) and job creation, signal a slowdown, but Mas said this stems from supply constraints rather than fading demand.

Services, too, drive much of the economic vitality, posting stronger gains than in 2024. Performance improved steadily through the semester, with tourism-linked activities showing solid business and sales growth. Non-tourism services hold even greater potential for expansion.