Andalusia GDP growth reached 2.8% in Q1 2026, outperforming the Spanish average as services, construction and hospitality continue supporting the regional economy.
Andalusia GDP growth continued outperforming the national average during the first quarter of 2026, reinforcing the region’s position as one of Spain’s strongest economic performers despite wider geopolitical and macroeconomic uncertainty. Preliminary figures published by Andalucía’s regional statistics institute, IECA, show year-on-year growth of 2.8% during Q1 2026, marginally ahead of Spain’s overall 2.7% expansion reported by the national statistics institute, INE.
The numbers may appear incremental at first glance, but within the context of a slowing European economy, they are significant. Andalucía has now maintained remarkably consistent growth momentum across multiple quarters, driven largely by services, tourism-linked activity, construction and continued inward investment.
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Andalucía continues outperforming expectations
The latest figures position Andalucía as Spain’s third fastest-growing regional economy, behind only Valencia and Madrid. More importantly, the region has largely avoided the slowdown many economists anticipated entering 2026. Prior forecasts from analysts at the end of 2025 suggested regional growth could fall closer to 2%, yet Andalucía continues operating materially above that level.
The region has now sustained strong growth momentum for almost two years, with previous quarters repeatedly exceeding the 3% threshold before stabilising at the current 2.8% level.
Managing Partner James Evans notes, “The Costa del Sol is increasingly behaving like a structural growth market rather than a cyclical one. Demand drivers today are much broader and far more international than they were a decade ago.”
Services remain the dominant economic driver
The services sector continues to underpin the Andalusian economy, contributing 2.4 percentage points of the Andalusia GDP growth overall. While construction and industry technically expanded at faster rates individually, the scale of Andalucía’s services economy means its influence remains dominant. Within the sector itself, information and communications recorded the strongest growth at 11.5%, followed by trade, transport and hospitality at 5.8%.
The region continues benefiting from international tourism, remote working migration, second-home ownership and lifestyle-driven relocation trends, all of which directly feed into hospitality, retail and residential demand.
Professional services also expanded strongly at 4.8%, reflecting increasing business activity across legal, financial and advisory sectors connected to Andalucía’s growing international profile.
Construction and real estate continue accelerating
Construction emerged as the fastest-growing major sector during the quarter, expanding by 5.1% year-on-year. That acceleration reflects what is already visible on the ground across Marbella, Estepona and Benahavís, continued development activity, rising infrastructure investment and sustained appetite for both residential and hospitality-led projects.
The region’s real estate sector itself recorded more moderate growth at 1.5%, though this figure often understates the wider impact property has across the economy through associated industries including construction, legal services, interior design, hospitality and tourism.
Large-scale branded residences, luxury hospitality projects and urban expansion plans are continuing to move forward despite wider European uncertainty.
Why hospitality and tourism still matter
Hospitality continues to play a central role within Andalucía’s economic structure. Trade, transport and hospitality combined recorded growth of 5.8%, significantly outperforming broader national expectations and reinforcing the resilience of southern Spain’s tourism economy.
This is particularly important given ongoing geopolitical instability and weaker consumer confidence across parts of Europe. Rather than slowing demand materially, Andalucía appears to be benefiting from a wider repositioning trend where international buyers and travellers increasingly prioritise climate, lifestyle, security and connectivity.
Marbella, in particular, continues attracting a blend of traditional second-home buyers, long-stay residents, entrepreneurs and increasingly mobile international families. That diversification makes the local economy more resilient than purely tourism-dependent destinations.
A More Controlled Urban Future
One of the more notable aspects of the latest figures is how little geopolitical turbulence appears to have impacted Andalucía so far. While some sectors nationally are showing signs of moderation, the Costa del Sol economy continues benefiting from structural international demand. This includes ongoing inward migration from northern Europe, rising interest from US buyers, sustained Middle Eastern investment and continued demand within the ultra-prime property sector. At the same time, infrastructure investment across Andalucía continues expanding, improving accessibility and supporting longer-term growth.
Alina Nouaimeh comments, “What makes Marbella different today is that demand is no longer seasonal in the traditional sense. The market is increasingly supported by permanent lifestyle migration and international capital rather than short-term tourism cycles alone.”
The latest GDP data reinforces what many within the Costa del Sol market are already experiencing directly, Andalucía’s economy continues expanding from a position of increasing international relevance, with services, hospitality and real estate remaining central to that trajectory.
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Research enquiries:
James Evans — Managing Partner
📞 +34 643 390 376 | ✉️ james@justrealestate.es
Sales enquiries:
Alina Nouaimeh — Partner
📞 +34 600 689 749 | ✉️ alina@justrealestate.es
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