Ibiza and Formentera's economy continued to grow during the second quarter of 2026, although at a slower pace than in the first three months of the year.

The Pitiüsa economy expanded by 2.5% year on year between April and June, down from 2.6% in the first quarter.

The slowdown coincided with a much weaker increase in tourist arrivals, while construction continued to provide an important source of activity.

Pitiüsa economy grows 2.5%

According to the latest CAEB Economic Outlook report, Ibiza and Formentera recorded 2.5% year-on-year economic growth during the second quarter.

That compares with growth of 2.6% in the first quarter.

The Pitiusas were the only island territory in the Balearics to record a slowdown during the period.

Mallorca accelerated from 2.8% to 2.9%, while Menorca maintained growth of 2.8%.

Across the Balearic Islands as a whole, the economy grew by 2.8% in the second quarter, one tenth higher than the first-quarter rate.

Tourism loses momentum

The most significant difference between Ibiza and Formentera and the other Balearic islands was in tourist arrivals.

Visitor numbers to the Pitiusas increased by only 0.5% year on year between April and June.

Mallorca recorded growth of 2.9%, while Menorca registered a 5.1% increase.

The figures mean that the increase in tourist arrivals in Ibiza and Formentera was considerably weaker than elsewhere in the archipelago during the spring quarter.

This slowdown in visitor numbers was identified by CAEB as an important factor in the different economic performance between the islands.

Construction provides support

While tourism lost momentum, construction continued to be an important source of economic activity.

CAEB described construction as maintaining its upward momentum from the end of 2025 and recorded growth of 4.1% across the Balearic Islands during the second quarter.

The sector remained one of the main pillars supporting the wider regional economy.

For Ibiza and Formentera, CAEB also identified an upswing in construction as a counterweight to the weaker tourism performance.

However, the available figures should be interpreted carefully because some of the increase in local construction indicators is linked to the extraordinary legalisation of existing buildings.

More than 1,000 works recorded

Data from the College of Architects of the Balearic Islands shows that 1,080 works were registered in Ibiza and Formentera during the 12 months to June 2026.

The combined budget exceeded €536 million.

At first glance, the figures suggest a substantial expansion of construction activity.

However, 453 of the 1,080 projects were extraordinary legalisation proceedings involving existing buildings.

That means around 42% of the total was connected to regularising existing construction rather than new building work.

The distinction is important when assessing how strongly the construction sector is actually expanding.

New housing tells a more mixed story

The construction figures also show a more complicated picture for new housing.

The number of newly created homes recorded during the period stood at 805, slightly below the previous year's figure.

At the same time, some segments of the housing market showed signs of renewed activity, including protected and price-limited housing.

The College of Architects has therefore warned against interpreting the increase in the total number of registered works as a straightforward boom in new construction.

Ibiza had fewer tourists in June

The tourism slowdown continued into the start of the summer.

In June, Ibiza and Formentera received 560,121 tourists, representing a decline of 4.75% compared with June 2025.

The Pitiusas were the only island destination in the Balearics to record a fall in tourist arrivals during that month.

The June figure should be viewed separately from the second-quarter figure. The 0.5% increase refers to the April-June period as a whole, while the 4.75% decline refers specifically to June.

Spending increased despite fewer June visitors

The reduction in tourist numbers did not translate into a fall in tourism revenue.

Tourist spending in Ibiza and Formentera reached approximately €690 million in June, an increase of 5.94% compared with the same month in 2025.

Average spending per tourist and per day also increased.

The development means that fewer visitors did not necessarily produce lower overall tourism income, although rising prices are an important factor when interpreting the increase in spending.

The wider Balearic economy regains momentum

The Pitiusas' slowdown contrasts with the performance of the Balearic economy as a whole.

The regional economy grew 2.8% in the second quarter, compared with 2.7% in the first quarter.

That ended five consecutive quarters of slowing growth that had begun in 2025.

Services were the main contributor to the regional economy's improvement, while construction remained another important pillar.

Average tourist spending per day also increased by 4.8% during the quarter.

Employment remains strong

The labour market continued to show positive figures across the Balearics.

Average Social Security affiliation reached 655,380 people during the second quarter, a record for the period.

Annual growth in affiliation moderated to 2.8%, compared with 3.4% in the first quarter.

The report also records an unemployment rate of 3.5% of the active population during the quarter.

The figures were affected by the timing of Easter recruitment and by the extraordinary regularisation process for foreign workers that ran from April 16 to June 30.

Prices remain a pressure point

The economic improvement has also taken place in a period of elevated inflation.

Consumer price inflation reached 3.4% in both May and June after standing at 3.1% in April.

Service prices rose particularly strongly, with tourism-related sectors among those experiencing significant increases.

Hotel and restaurant prices were up 7.6% year on year in June, according to the CAEB report.

That is relevant when interpreting higher tourist spending, because an increase in the amount spent does not necessarily represent an equivalent increase in the volume of goods and services consumed.

Investment remains an important driver

Investment grew by 3.9% across the Balearics during the second quarter.

Although that was below the 4.3% recorded during the first quarter, investment remained an important component of domestic demand.

CAEB linked the moderation partly to investment in construction.

The figure provides another indication of the role construction continues to play in the wider regional economy.

What the figures mean for Ibiza and Formentera

The second-quarter figures show an economy that is still growing, but with a different balance between its main sources of activity.

Tourist arrivals increased only marginally during the spring quarter, while construction provided an additional source of momentum.

At the same time, the island's construction indicators need to be interpreted alongside the large number of extraordinary legalisation files.

The result is not a straightforward picture of a tourism downturn being completely replaced by a construction boom.

Instead, the data points to continued economic growth in Ibiza and Formentera, with construction helping to support activity while tourism visitor numbers have become less dynamic.

A changing economic picture

Ibiza and Formentera entered 2026 after finishing 2025 with economic growth of approximately 3%.

Six months later, the annual growth rate has eased to 2.5%.

The islands remain in positive territory, but their performance now differs from Mallorca and Menorca, which both maintained or increased their growth rates during the second quarter.

The tourism figures also suggest that the number of visitors is becoming a less powerful source of additional growth than in previous years.

At the same time, higher tourist spending and continued construction activity are helping to sustain the economy.

What to watch next

The coming months will show whether the weaker growth in tourist arrivals during spring and early summer represents a temporary change or part of a longer-term shift.

For Ibiza and Formentera, the key indicators will include visitor numbers, tourism spending, construction activity, new housing projects and employment.

For now, the second-quarter data presents an economy that continues to expand, but at a more moderate pace and with construction playing an increasingly visible supporting role alongside tourism.