Diamonds And Pearls: Losing Majorca's industrial treasures

Economic diversity in Majorca is essential, but the contraction in sectors other than tourism is alarming. Over a period of five years, industrial activity has declined by just under 30%, a far greater fall than anywhere else in Spain. This reduction has affected more or less all the island's smaller industries, ones traditionally associated with the island - pearls, marine, footwear - as well as those that are less traditional, such as chemicals. You name it, it's on the way out.

It's those stats chaps again. The national statistics office has recorded the fall in the production index and has shown that Majorca's island geography is not totally to blame for the slump. The Canaries haven't suffered anything like the same scale of decline.

Isolation is a factor, though. It is estimated that because of transport costs alone, it can be 30% more expensive to produce locally, and then you have the costs of going the other way. The call has gone out for help in boosting exports, but it is not clear how this might be done, other than through local management of ports and the airport, as is being suggested. Quite how this might benefit in cost reduction, I'm unsure, as there are also the higher costs of local production associated with land. If you have ambitions of being a light manufacturer in Majorca, then you probably need your head examining, or you should at least consider an alternative location. Industrial land costs almost twice as much as the Canaries and six times as much as in Aragon, a mainland province within shipping distance of the island.

This high, prohibitive almost, cost of land is attributed in part to speculative developments and property acquisition. Go around Majorca and you will find industrial estates in most towns. In Inca, they are planning to build a third industrial estate, this for a town of under 30,000 people. On the larger estates in Palma, units are being abandoned because the costs are simply too great.

Why are all these industrial estates needed? The answer is that they're not. But built they nevertheless are, with a suspicion that someone might have profited illicitly. And they all come with a mix of usage. The new Inca estate has provision for a percentage of land for entertainment purposes; you might recall the talk of a theme park there. It is this sort of provision, as well as that for large car showrooms and banks (which can afford the higher rents) that is one reason for driving up the cost of what is then limited land for industrial purposes. This is not the whole story, however. Over supply would suggest that costs would be lower, but they're not. It's a familiar tale where Majorca land for residential purposes is concerned. Greed is probably one element, and the Majorcans are renowned for it, on top of which is the fact that units and land on industrial estates are bought by speculators who have no intention of renting them out at what might be affordable levels for smaller businesses.

Clearly if industrial activity slumps to the degree that it has and may continue to, and if nothing comes along to replace the old factories, then there is an employment problem. Decline of manufacturing may be compensated by an increase in services, but the question then is, which ones. Majorca needs an economic strategic plan, one that has been necessary for years. But it is no nearer getting one, and all the while the traditional industries and small businesses fold or shift out of industrial units with their inflated price tags.

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