Confidence on the High Street is down. | Jaume Morey

The latest Business Confidence Index from the National Statistics Institute points to a fall of 6.6% in the Balearics in the first quarter of the year by comparison with the first quarter of 2021.

This drop in confidence is the second greatest in the country behind Asturias (down 9.7%). Of other negative confidence levels, Navarre is -5.6%, Castile and León -5.5%, Valencia -4.6% and the Canaries -4.1%. Only two regions register positive indices - Madrid with 3.1% and Aragon with 2.1%.

For Spain as a whole, confidence is down 2.5%. This follows five consecutive quarters of positive confidence, the highest - since the pandemic shattered confidence - having been 12.3% in the third quarter of 2021.

Of businesses surveyed, 57.8% said they had "normal" expectations for the quarter, while 27.5% were pessimistic, an increase of six points compared with the final quarter of 2021. There was optimism among 14.7%, a decrease of 4.2 points.

The loss of confidence is general across all sectors, but is greatest for hospitality and transport (-6.9%), followed by retail (-3.2%), construction (-2.8%), industry (-1.6%) and other services (-0.9%).

In the fourth quarter of 2021, confidence was 1.1% for the whole of Spain, down markedly on the 12.3% in the summer. The loss of confidence for the current quarter is almost certainly a consequence of Omicron, but this wasn't a factor when the survey for the fourth quarter was conducted, when fears about inflation were dominant and remain an issue.