Spanish unemployment up to 24.63%

Unemployment now at 24.63%
Unemployment now at 24.63%

According to the latest figures released by the National Institute of Statistics unemployment in Spain increased slightly to 24.63% during the second quarter of 2012.

The INE summarise the main points  as follows:

  • Employment in the second quarter of 2012 registers a decrease of 15,900 persons, reaching a total of 17,417,300 employed persons. The quarter on quarter employment variation rate stands at –0.09%.
  • The economically active population increases by 37,600 persons this quarter. The number of unemployed increases by 53,500 persons, standing at 5,693,500.
  • The unemployment rate grows 19 hundredths, standing at 24.63%. In turn, the activity rate rises at 60.08%. This quarter, the loss of employment increases 70,000 persons among men, whilst decreases in 16,400 among women.
  • The employment increases 14,600 among women, whilst decreases 30,600 among men.
  • Employment increases in 42,800 persons in Services and in 6,200 in Construction. The employed persons decreased 44,000 in Agriculture and 21,000 in Industry.
  • Wage-earners with a permanent contract increase by 4,400, and wage-earners with a temporary contract do so by 18,300.
  • The number of households with all of their active members unemployed increases by 9,300 this quarter, standing at 1,737,600.
  • By Autonomous Community, the unemployment rate fluctuates between 14.56% in País Vasco and 33.92% in Andalucía. The activity rate fluctuates between 52.50%, recorded in Principado de Asturias, and 67.54%, registered in Illes Balears.
  • The Autonomous Communities that most increases their employment are: Illes Balears (60,400 persons), Comunidad de Madrid (7,500), Región de Murcia (6,800), Castilla y León (5,600) and Comunitat Valenciana (4,900). In contrast, the Autonomous Communities that registered the greatest decreases in employment this quarter were: Andalucia (23,300 fewer employed persons), Castilla – La Mancha (19,500 fewer), Cataluña (19,100), Galicia (16,800) and Canarias (12,400).
  • The greatest decreases in unemployment persons are registered in Illes Balears and Cataluña. In turn, Andalucía, Castilla – La Mancha, País Vasco, Comunidad de Madrid and Galicia registered the greatest increases in the number of unemployed persons.

Economically active population and activity rate 

The economically active population experienced a decrease of 37,600 persons in the second quarter of 2012. The number of economically active persons stood at 23,110,400 persons. In interannual terms, the number of economically active persons decreased by 26,400 persons.

The general activity rate increased 14 hundredths, up to 60.08%. The female activity rate remained at 53.35%, while the male rate increased 29 hundredths and reached 67.15%.

The general activity rate of Spaniards rose 27 hundredths, while the rate of foreign nationals decreased 73 hundredths, this quarter. The distance between the activity rates of Spaniards and foreign nationals exceeded 17 points, in favour of the latter, this circumstance being explained by the different age structures of both populations.


The number of employed persons decreased by 15,900 persons in the second quarter of 2012, standing at 17,417,300. The interannual employment variation rate stood at –0.09%.

The drop in employment affected men (30,600 employment fewer) exceeds the increase in the occupation of women (14,600 employment fewer). By nationality, the number of employed foreign nationals increased by 9,100, while that of Spaniards decreased by 25,000.

By age, employment grew in persons older than 54 years old in 49,900 persons. The greatest decreases were observed in men between 40-44 and 25-29 years old (23,700 and 21,900 fewer respectively), Among women, the group of 20-24 years old experienced the greatest drop (11.500).

The number of employed persons increased in Services, registered 42,800 more employed persons and Construction with 6,200. The employment decreased in Industry (21,000 fewer) and Agriculture (44,000 fewer).

The increase in the number of employers this second quarter (15,000 more employers) did not compensate for the decrease in independent workers (12,900 fewer) and in the remaining self-employed workers (2,600).

The number of wage earners decreased by 13,900. Those with a permanent contract decreased by 4,400, while the number of wage earners with temporary contracts decreased 18,300. The temporary employment rate decreased one tenth, standing at 23.66%.

Part-time employment increased by 94,300 persons this quarter, whilst full-time employed persons decreased by 110,300. The percentage of persons working part-time increased more than half point, up to 14.93%.

The interannual variation of employment was –4.48%, almost nine tenths lower than that registered the previous quarter. Employment experienced a decrease of 885,800 persons in one year, 895,200 of whom were wage-earners and 10,100 of whom were self-employed workers.

The drop in the interannual employment among men (570,100 fewer) were higher than those women (315,700).

Unemployment and unemployment rate

The increase in unemployment was 53,500 this quarter, standing at 5,693,100. In the last 12 months, the total figure of unemployed persons increased by 859,400 persons.

The unemployment rate rose 19 hundredths, as compared with the first quarter of 2012, standing at 24.63%.

The male unemployment rate increased 48 hundredths, up to 24.57%, whilst the female rate decreased 15 hundredths, and stood at 24.71%. The composition of unemployment observed since the year 2008 remained, with relatively little distance between the male and female rates, and a greater number of unemployed men than unemployed women.

By nationality, the unemployment increased 113,300 among Spaniards and decreased 59,700 among foreign nationals. The unemployment rate for the foreign population was 35.76%, 13 points higher than that of persons with Spanish nationality.

Unemployment decreased in Construction (40,500 fewer) and in Services (84,500 fewer). In contrast, unemployment increased in Industry (23,500 more) and in Agriculture (11,400 more). Unemployment also increased among those persons who lost their job over a year ago (107,400 more), and among those seeking their first job (by 36,100).

The number of unemployed persons increased in all sectors in the last 12 months.

You can read the complete press release here: Economically Active Population Survey – Second quarter of 2012


House prices continue fall in Q2

The price fall continues unabated
The price fall continues unabated

House prices in Spain fell during the second quarter by 11.5% compared to the same period in the previous year, up from 9.2% in the previous quarter.

The report, from Tinsa, shows that the majority of the autonomous regions followed the downward trend with La Rioja recording the greatest fall of 22.6%, bringing the prices back to 2003 levels. Catalonia followed with an 18% decline, followed by Aragon (-16.3%), Valencia (-14%), Castilla-La Mancha (-13.8%) and Madrid (-13.8%).

Staying within a few points of the national average were Castilla y León (-11.8%), Andalusia (-11.6%), Navarra (-11.5%), Murcia (-10.8%), the Canary Islands (-10.6%) and the Balearic Islands (-10.5%). The areas least affected by the decline in prices include Extremadura (-10.1%), Galicia (-6.2%), Asturias (-5.2%), Ceuta (-4%), Cantabria (-3.6%) and Melilla (-3.3%).

On a provincial level a more pronounced decline was recorded with above average falls in Tarragona (19%), Toledo (-18.7%), Zaragoza (-18.6%), Almeria (18.1%) and Segovia (18%).

At the other end of the scale a few regions registered smaller declines, or none at all, including Basin (-0.1%) and Orense (0%). Lugo is the only province that, provisionally, shows a slight rise of 2.1%.

Looking at the cumulative decline in prices since the crisis first hit in 2007 the north-east corner of the country stands out with the largest falls recorded (in addition to La Rioja) in Catalonia (-39.3%), Aragon (-37.8%) and Valencia (-36.2%).

Included in this group, although located in the central zone, and with prices influenced by Madrid, is Castilla-La Mancha where the cumulative decline from 2007 now stands at 38.9%.

The cumulative decline now stands at over 40% in a number of provinces including Toledo (-43.1%), Guadalajara (-41.1%), Zaragoza (-40.4%), Tarragona (-40.2%) and Barcelona (-40%). Also on the verge of joining the over-40% group are Almeria (-39.2%), Malaga (-39.1%), Girona (-37.2%) and Valencia (-37.2%).

Conversely, the provinces that showed lower cumulative declines were those with lower population density and a slow second-home market, mainly in the north-west quadrant. Those provinces include Soria (-13.8%), Zamora (-10.2%), Orense (-6.5%) and Lugo (-5.7%).

You can download Tinsa’s complete report here (ES): Tinsa Market Report Q2 2012

House prices to continue falling over next three months

Prices still falling
Prices are still falling

According to the ‘Real Estate Confidence Index’ for the third quarter, drawn up by the Evaluation Society (Sociedad de Tasación), based on the opinions of up to 700 experts in the sector, housing prices in Spain are expected to fall further for at least the next three months due to the deteriorating economic situation and the drop in sales of apartments.

This latest report notes that this downward trend in prices will affect “virtually all the regions in Spain”. However, it points to a situation of “stability” in the ‘stock’ of homes, a trend which will “also be maintained over the next few months”.

This is the Society’s forecast for the next three months and explains the drop in the real estate confidence index from 31.8 points in April to 31.2 points from a possible 100 in the last estimate.

“This development is a clear reflection of the degree of distrust that exists right now in the market” said the Society, while pointing out that 50 points would be a situation of neutrality or stability in the market.

As far as second residences are concerned, the outlook is “the most negative of all those which have been analysed in the study,” although it improved almost two points over the first quarter of 2012.

Other results suggest that confidence in the development of promotions and building plots is again negative and even falls two points over the second quarter to 26.5 points. Moreover, with regards the sale of commercial premises, the third quarter of 2012 is likely to continue with a negative outlook.

The Evaluation Society noted that the real estate economic confidence index varied “slightly” in all areas of the country. The communities whose outlook most improved over the first quarter were Asturias, which advanced 6.7 points, followed by Cantabria (+2.4 points) and Murcia (+2.3 points).

By contrast, the Balearic Islands’ confidence index dropped 5.6 points, breaking with the rising forecasts for the previous quarter. The same was true for Castilla y León (-3.3 points) and Galicia (-3.2 points).

Looking at some of the variables, with regard to pricing, experts gave an assessment of 24.1 points to Catalonia, the lowest of all, while forecasting an upward swing in La Rioja, with 39.5 points.

Finally, El Mundo reported that normal home sales expectations are lowest in the Basque Country (27.5 points) and highest in Extremadura (41.7 points), a trend that worsens with second homes, with confidence being lowest in La Rioja (19.8 points) and highest in the Canary Islands (29.5 points).

Article source:

First Business Confidence Indicators report from INE

INEToday, for the first time, the National Statistics Institute is publishing the results of its new operation on Business Confidence Indicators (BCI).

The survey on which the BCIs are based is the first opinion poll conducted by the INE, and it is prepared based on a representative sample of 7,694 establishments, whose opinions began to be collected for the first quarter of 2012.

Summary of Results

The Harmonised Business Confidence Index (HBCI) of the INE stands at 101.39 points for the second quarter of 2012, indicating an improvement of 1.39 points, in the confidence of businesspersons, with regard to the first quarter (base 100).

There is a reduction in the lack of confidence by businesspersons regarding the future performance of their business in the second quarter of the year. In this sense, for the whole of Spain, the Balance of Expectations, that is, the difference between the opinions of optimistic and pessimistic business establishments, reaches -35 points in the second quarter, as compared with the -44 points registered in the first quarter, indicating a nine-point improvement.

Despite the improvement this quarter, the business confidence climate remains unfavourable. 8% of business establishments are optimistic regarding the future performance of their business as the quarter commences, whereas 43% are pessimistic.

Opinions regarding the coming quarter (Expectations)

8% of establishments believed that the performance of their business during the second quarter of the year would be favourable, whereas 43% believed that it would be unfavourable. The remaining 49% believed that it would be normal.

The difference between the percentages of favourable and unfavourable responses, known as the Balance of Expectations, stood at -35 points for Spain as a whole.

In the first quarter, 6% of the establishments believed that the performance of the business would be favourable, whilst 50% believed that it would be unfavourable, with the Balance of Expectations thus standing at -44 points.

Therefore, the lack of confidence by businesspersons as per Expectations decreased nine points (-44 points in the first quarter, and -35 points in the second).

Opinions regarding the last quarter (Situation)

In terms of the responses regarding the last quarter, 7% of the establishments expressed a favourable opinion regarding the past performance of their business in the first quarter, as compared with the 48% that had an unfavourable opinion.

The difference between these percentages of favourable and unfavourable responses referring to the last quarter, known as the Situation Balance, stood at -41 points, thereby improving the Expectations previously expressed for that first quarter, which stood at -44 points.

You can download the full report here: Business Confidence Indicators  – Second quarter of 2012

Germany dismisses Spain’s pleas for help

Merkel saying no to more cash
Merkel saying no to more cash

German Chancellor Angela Merkel has angrily dismissed pleas from Italy and Spain for financial aid as a rift develops that could shatter attempts to find a fix for the crisis at a meeting of EU leaders today.

Ms. Merkel was in Paris last night for emergency talks with French president Francios Hollande but before she left Germany she told her MP’s at the Bundestag, the lower house of parliament in Berlin, that instead of continuing to provide cash bailouts for the Eurozone more effort was needed to step up debt reduction and economic reforms.

“I fear that at the summit we will talk too much about all these ideas for joint liability and too little about improved controls and structural measures,” she said.

Spanish Prime Minister Mariano Rajoy said he would ask other EU leaders to allow euro bailout funds or the European Central Bank to stabilise financial markets by assisting in the reduction of borrowing costs, which are currently running at nearly 7% for Spain.

“We can’t keep funding ourselves for a long time at the prices we’re currently funding ourselves,” Rajoy said. “There are institutions and also financial entities that cannot access the markets. It is happening in Spain, it is happening in Italy and it is happening in other countries.”

Spain’s central bank said the recession is likely to deepen in the second quarter of this year while official figures show the government’s deficit had reached 3.41% of GDP in the first five months of the year, already approaching the 3.5 % target for the year.

Construction of new homes slowing

New home construction still slow
New home construction still slow

According to data released by the Ministry of Public Works the number of new homes completed in the first quarter of the year stood at 30,151, representing a decrease of 31.4%, compared to the same period in 2011.

Private developers accounted for 29,630 of the total, or 98.2%, with the government making up the difference.

Of the private constructions 18,617 were commercial properties showing an interannual decrease f 41.1%. Individuals and communities accounted for 8,005 constructions, down 3.4% on the year. Cooperatives accounted for 2,068, a 10.1% increase and there were also 940 completion certificates granted for other private promoter works.

The liquidation value of the execution of these constructions fell by 18.4% to 3,766 million euros.

Spain has recorded four consecutive years of decline in property construction. Since the peak in 2007 figures show a cumulative fall of 74%. In 2007 there were 641,419 new properties completed, compared to 167,914 in 2011.

The pain in Spain

The Pain in SpainFinding a nice news story gets more laborious every day. Trawling through the news and my inbox finds nothing but sad, depressing news about how Spain is about to fall in to the sea along with Greece and the Euro.

All the press releases I get are a direct line to depression. They all speak of “record unemployment”, the “worst crisis” and the “negative outlook”, and this week it’s all about the bailout with Ireland telling Spain to “imagine the worst, and then double it.”

Will Spain be fixed if the IMF throw 100 billion euros at them? Will Spain suddenly be generating growth and employment with that money? Don’t make me laugh! The banks will get the money and Sr. Spaniard on the street will not benefit at all.

For a start, we’re not really sure how much the bailout will be. The initial approval of 100 billion euros has caused quite a stir. However, according to reports the independent audit that is taking place now is likely to put the figure closer to 60 billion. Still a good size bailout but quite considerably less than initial estimates.

But how will the people benefit from capital injected directly into the banks? How are jobs going to be created from this bailout? How will throwing more money at the banks eternally bottomless pit generate growth?

The plan is that the banks get the money and pass it on in the form of cheap loans and mortgages to businesses and private individuals.

There is a huge problem with that though; who wants to borrow money now? If you listen to the government plans you get the impression that the banks are full of people desperate to get a mortgage; business owners desperate for a loan. Where do they get that idea from? This is simply not the case. If people are struggling to survive due to tax increases and salary cuts why does Rajoy think they want to increase their debt burden by borrowing more? That is not the problem Prime Minister Rajoy. People are not spending money because they have no confidence in you, Spain’s economy and the future of the Euro (which was a stupid idea in the first place).

The banks are failing because they are poorly managed. They take our money and stick it in short-term speculative investments, which then fail, and your money is gone. So then they go cap-in-hand to the government who then, with annoying regularity, bail them out.

That is the problem Rajoy. The bank purses have no bottom. Each time you put money in it is simply swallowed up and then needs more. They should be closed down, everyone take their money out and let the failing businesses go.

Take the 100 billion euro bailout fund and plough it into infrastructure. There are thousands of miles of road that needs maintenance so employ a few thousand people to get on with it. We need more schools so build some. There needs to be improvements in infrastructure all over the country so plan for some employment drives with the bailout money. I think Germany, and other contributors, would be happy to see the money making a difference to the people of Spain not just the banks, and more importantly it would create jobs and growth. I’m no financial analyst but the answer seems pretty clear to me. Money to the people, not to the banks. Am I totally wrong? Am I missing something?

At least the Spanish football team are having a good week. Good luck against Croatia today!

Welcome reduction in Capital Gains Tax

The Spanish government have announced a very welcome reduction in capital gains tax (Plusvalia) on second homes or investment properties purchased between May 11th and Dec 31st 2012. The reduction will be applied when the property is sold.

The announcement was made by Ana Pastor, head of Public Works, which includes the housing department, and could be a welcome boost for the property market.

Everyone is entitled to the reduction, both individuals and companies, residents and non-residents, but it will not apply to sales between parents and their children, nor will it apply to main residences which already benefit from a reduction.

The current capital gains tax rates for 2012 are as follows:


0-6,000 euros – 21%
6,000 – 24,000 euros – 25%
24,000 euros or more – 27%


Flat rate of 21%

All of the rates above will benefit from a 50% reduction if the property being sold was purchased between the specified dates.

This is a welcome stimulus for the property market that has been struggling to recover from the bubble which burst in 2007 leaving thousands of empty, unsold or incomplete properties all over Spain.

Bank of Spain first quarter report

Bank of Spain
Spain in “a renewed recessionary situation” – Bank of Spain

The Bank of Spain have released their Spanish economy quarterly report for the first quarter of 2012.


In 2012 Q1, Spanish economic activity continued on the declining path initiated in the closing months of 2011, in a setting of high financial tension. On the as-yet incomplete information available, the contraction in GDP is estimated to have been slightly higher than that in 2011 Q4, with a quarter-on-quarter rate of change of -0.4%. National demand fell once again (-0.9 pp), as has been the case over the past four years, although the decline was milder than in the preceding quarter, while the contribution of net external demand was positive once more (0.6 pp), but likewise lower than that in the previous three months. After posting rises for seven consecutive quarters in year-on-year terms, GDP fell back to a rate of -0.5% (0.3% in the previous quarter).

Employment fell once more, sharply so, posting an estimated year-on-year decline of close to 4%. And compensation per employee slowed across the economy, leading, in combination with high productivity growth, to a significant reduction in unit labour costs, prolonging the trajectory of the last eight quarters. The considerable sluggishness of domestic spending prompted a slowdown in the year-on-year rate of change of consumer prices from December to March, and the CPI stood at a 12-month growth rate of 1.9% in this latter month. Easing was more visible in the CPI excluding unprocessed food and energy, the year-on-year growth rate of which fell to 1.2%. In terms of the HICP, the inflation differential with the euro area stood in March at -0.9 pp, reflecting a reduction which was extensive to all the main HICP components.

On the international economic front, the situation on euro area markets improved somewhat compared with the stress peaks experienced in the closing months of 2011. Here, the ECB’s conventional and non-conventional monetary policy measures contributed notably, as did the approval of the second bail-out programme for Greece following the restructuring of its debt in private hands and the progress in the ongoing reform of economic governance in the euro area. However, instability returned in the opening days of April, affecting Spain and Italy acutely owing to the doubts arising over the adjustment processes under way in both countries.

The indicators available suggest economic activity in the euro area stabilised – or fell off very moderately – in the opening months of 2012, following the fall in GDP in 2012 Q4; nonetheless, cyclical divergences between the member countries continued to widen. Outside the euro area there was a moderate recovery in the United States, some improvement in Japan and a gradual slowdown in activity in the emerging economies, which nevertheless remain very buoyant. Global inflation continued to slacken, although the rise in oil prices, which peaked at $125 per barrel in February to dip slightly thereafter, poses a risk.

Turning to economic policies, measures in the euro area played a key role throughout the quarter. In terms of European governance, the seriousness of the sovereign debt crisis led control over public finances to be strengthened. This took the form of the signing, on 2 March, of the Treaty of Stability, Coordination and Governance in the Economic and Monetary Union. The Treaty incorporates the Fiscal Compact, under which 25 Member States, including Spain, have committed themselves to transposing into national legal frameworks a balanced-budget rule and an automatic correction mechanism for deviations at national level. Further, to reinforce surveillance of non-fiscal macroeconomic imbalances, the Commission presented in February its first Annual Alert Mechanism Report, designed to detect and correct situations of risk in this area. The report identifies 12 EU countries, including Spain, which should be examined in greater depth to determine whether the degree of severity of the imbalances detected calls for the initiation of an excessive imbalance procedure. As to crisis-prevention and resolution mechanisms, significant headway in setting up the European Stability Mechanism (ESM) was also made. The ESM required amendments to the Treaty on European Union, and its full operationality as a permanent facility has been brought forward one year (to July 2012) and its financial capacity (€500 billion) has been temporarily raised with the resources not used by the European Financial Stability Facility.

The ECB adopted a broad range of measures to restore monetary policy transmission channels and to reduce the likelihood of a traumatic contraction in credit supply that could have ensued given the growing feedback loop between sovereign risk and banking risk in the euro area that became discernible in the closing months of 2011. Among its standard policy measures, the ECB Governing Council held interest rates at an all-time low of 1% for its main refinancing operations, following the cuts made in November and December. This was in a setting in which euro area inflation, at 2.7% in March, was chiefly attributed to increases in the more volatile components, and in which inflation expectations remained anchored over the policy-relevant horizon. As to non-standard measures, in February the ECB approved specific criteria for the temporary acceptance of additional credit claims as collateral and implemented the second three-year longer-term refinancing operation with full allotment. Taken together, the two tenders considerably increased the liquidity buffer available to banks to undertake their refinancing operations, and they proved key to overcoming the moments of peak tension experienced last November.

There is a lot more… you can read the full press release here: Quarterly Report on the Spanish Economy

Bankruptcy proceedings increased in first quarter

INEThe number of companies declared bankrupt in Spain increased by 21.5% in the first quarter as compared with the same period of 2011, according to new figures released by the National Statistics Institute (INE).

Of the companies, 31.3% had construction and property development as their main activity.

During the first quarter of 2012, the number of debtors processed reached 2,224, representing a 21.5% increase, as compared with the same period the previous year.

By type of proceeding, 2,105 were voluntary (22.3% more than the first quarter 2011) and 119 were necessary (9.2% more). Considering the type of proceedings, ordinary proceedings increased 149.6%, and abbreviated proceedings increased 11.7%.

Companies processed, by legal nature and turnover bracket

Of the 2,224 debtors processed in the first quarter, 1,958 were companies (individuals with business activity and corporations). 75.3% of the companies declared bankrupt were Private Limited Companies.

67.1% of the companies declared bankrupt were within the lowest turnover bracket (less than two million euros), and were mainly Private Limited Companies.

87.1% of companies declared bankrupt during the first quarter of 2012 did not belong to any business group. Of the remaining companies declared bankrupt, 12.2% belonged to a Spanish group, and 0.7% to a group under foreign control.

Companies declared bankrupt, by economic activity and number of employees

31.3% of companies declared bankrupt carried out their main activity in Construction and property development, 18.7% in Industry and energy, and 17.7% in Trade.

Regarding the number of employees, 60.6% of the total number of companies declared bankupt were within the bracket of 1 to 19 employees.

Geographical distribution of debtors processed

The Autonomous Communities of Cataluña, Comunitat Valenciana, Comunidad de Madrid and Andalucia accounted for 58.4% of the total debtors processed during the first quarter of 2012.

Cantabria, La Rioja and Extremadura were the Autonomous Communities with the fewest debtors processed.

You can download the full press release here: Bankruptcy Proceedings Statistics – First quarter of 2012