Unemployment rises in October

Queues got longer in October
Queues got longer in October

The number of unemployed people registered at the offices of the public employment services (formerly INEM) rose by 128,242 in October, which is up 2.7% compared to September, and put the total number of people unemployed in Spain at 4,833,521, the highest level in the comparable historical series, which started in 1996, reported the Ministry of Employment and Social Security.

The October increase, a month in which unemployment historically tends to increase, is the third rise in a row after the August and September figures, and the third worst registered for this month in the historical series after October 2008 (+192,658 unemployed) and October 2011 (+134,182 unemployed).

In this regard, the Secretary of State for Employment, Engracia Hidalgo, stressed that although the rise in October cannot be considered a “good thing”, it is less than it was last year, and marks five consecutive months in which “unemployment has performed better than in 2011.”

Since October 2011, unemployment has increased by 472,595 people, or 10.84%.

According to the employment data, unemployment rose in October for both sexes, but more among men, with an increase of 69,008 (+3%), compared with a rise in female unemployment of 59,234 (+2.5%), bringing the total of unemployed women to 2,440,825 and 2,392,696 for men.

Unemployment rose in October in all sectors except in construction, where it fell by 3,670 people (-0.48%). Services accounted for three-quarters of the rise in unemployment in October, with 97,610 more unemployed (+3.4%), followed by agriculture, with 24,401 more unemployed (+15.1%); industry, which added 8,888 more unemployed (+1.7%), and the group without previous employment, with 1,013 more unemployed (+0.27%).

The rise in unemployment in October was more pronounced among those over 25 years of age, with 107,638 more unemployed (+2.5%), while among the under 25s unemployment increased by 20,604 persons (+4.4%).

The foreign population in Spain increased their number of unemployed in the tenth month of the year, recording 17,890 more unemployed than in September (+3%). In total, the number of unemployed immigrants stood at 605,959 at the end of last month, which is a decrease of 9,806 unemployed (-1.6%) compared to October 2011.

Unemployment down in two regions

In October, unemployment rose in all regions, except in the Canary Islands and Valencia, where the number of people unemployed fell by 993 and 867, respectively. Among the increases, the most significant were noted in Andalusia, with 32,139 more unemployed, and Castilla-La Mancha (+16,791).

With regard to the provinces, unemployment fell in five, especially in Valencia (-3,406), Castellón (-820) and Las Palmas (-727), and it rose in all the rest, especially in Madrid (+12,897) and the Balearic Islands (+9,474).

In terms of recruitment, El Mundo reported that in October a total of 1,427,173 contracts were recorded in the employment offices, an increase of 10.2% from October 2011. Of these, 130,632 were permanent, equivalent to 9.1% of the total, and 34.3% higher than the same month of 2011.

In the first ten months of the year, the total number of contracts reached 11,558,721, up 4.1% from the same period in 2011. Of these, only 7.8% were permanent, with a total of 908,090, 5.4% less than in January-October last year.

Article source: Kyero.com

Property sales rise for first time in 17 months

After 17 months of decline, the number of property sales in Spain experienced a year on year increase in August. Official statistics report 27,708 transactions, 3% more than in August 2011.

Sales in August constitute the first figures since the government announced changes to tax benefits for home purchases that will begin in January 2013. The removal of tax relief appears to have encouraged some buyers to take advantage of the current legislation.

Specifically, Mariano Rajoy’s government announced in July that, as of 2013, those who buy a home will be unable to deduct income tax benefit. Also ending are favourable tax rates for new house purchases, which will increase from 4% to 10%.

For resales, the transfer tax (ITP) with a tax of around 8% is also rising in several regions to 10% in 2013.

The data released by the INE reveals large regional differences for example in Castilla-La Mancha, La Rioja and the Balearic Islands, home purchases have increased by nearly 30%, while in Navarra and the Basque Country there were similar variations but entirely opposite, dropping by up to 30%.

Article source: Kyero.com

Hotel Bookings down 2.1% in August

Overnight stays in hotels in Spain registered a decline of 2.1% in August, despite the record increase in the number of foreign visitors. 40.8 million bookings were made in the eighth month of the year, which was 2.1% less than the same period of 2011, due to the fall in domestic demand.

The 3.5% rise in overnight stays by foreign tourists could not compensate for the 10% decrease in those made by residents, the National Statistics Institute reported on Monday.

Last month, the average stay was four nights per traveller, with a rise of 1.1%, despite the 0.8% annual increase in the Hotel Price Index, which took the revenue per occupied room to an average value of 84.6 euros (2.8 euros more than last year) and revenue per available room to 59.7 euros (0.4 euros more).

In August, 70.7% of the places available were booked, which was 2.6% less than a year earlier, while weekend occupancy was 72.6%, down 3.6%.

Foreign tourists accounted for 25.25 million of the overnight stays in August, compared with 15.56 million made by Spanish residents. The United Kingdom and Germany lead the ranking, with more than 12.5 million stays in August, making up 49.6% of the total, and Russia has now become the fifth source market, with a 29.7% increase in overnight stays, and 6.1% of the total.

El Pais reported that the Balearic Islands were confirmed as the main destination chosen by non-residents, with an increase of 4.5% compared to August 2011, followed by Catalonia (+6.4%) and the Canary Islands (+0.3%).

Travellers resident in Spain mostly chose to go to Andalusia, Valencia and Catalonia, although these regions recorded year-on-year declines in overnight stays of 6.9%, 4.7% and 11.9%, respectively.

Article source: Kyero.com

Rising fuel prices spark five tenths increase in August CPI, to 2.7%

Petrol prices are still rising
Petrol prices are at record highs

According to the advance indicators of the evolution of prices in Spain, published yesterday by the National Statistics Institute, the Consumer Price Index (CPI) climbed five tenths in August, bringing its annual rate to 2.7%, mainly due to the rising price of fuels and lubricants.

Thus, the annual CPI marked two months of increases after rising three tenths in July to 2.2%, due to the increasing costs of medicines.

The highest rate of the year

The 2.7% rate reached in August is the highest the CPI has recorded during this year, and the highest since November of last year, when inflation stood at 2.9% year-on-year.

An increase in the annual CPI of this level (five tenths) has not been registered since late 2010, when inflation rose seven tenths in December, from 2.3% registered in November, to 3% in the last month of that year.

Meanwhile, the Harmonised Consumer Price Index (HCPI) for August stood at 2.7%, five tenths above the July rate.

The statistics agency reiterated that the advance indicators are only a guide, and will not necessarily coincide with the final data, to be published on 12th September.

The National Statistics Institute attributed this remarkable rise in prices in the eighth month of the year primarily to the rising prices of fuel and lubricants.

The prices for a litre of petrol and diesel have set new record highs this week, after increasing by 0.06% and 0.14%, respectively, just as people are returning from their August holidays and are also facing the increases in VAT, which will take effect from 1st September.

Specifically, the price per litre of petrol, which last week broke the 1.5 euro barrier, stood at 1.512 euros, while the price of diesel stood at 1.422 euros per litre, according to the Oil Bulletin data.

These prices reflect an average, but in some Madrid service stations a litre of petrol is selling at 1.538 euros, and that of diesel, used by about 80% of Spanish vehicles, is already exceeding 1.44 euros, according to data from the Ministry of Industry consulted by Europa Press.

Thus, petrol and diesel are maintaining the upward trend that began in July and mark a second consecutive week of records. Since the beginning of July, the price of a litre of petrol has gone up by over 12%, while diesel is 8.56% more expensive.

Filling the fuel tank of an average vehicle with a 55 litre tank now costs 83.1 euros, which is 10 euros more than a year ago. In the case of diesel, filling a tank costs 78.2 euros, also almost 10 euros more expensive than at the end of August 2011.

These price rises will be even greater with the increase in VAT from 18% to 21%, starting on Saturday, which will mean an increase of about 3.6 cents on the price per litre of petrol and about 3.5 cents for diesel, which could bring the prices of both fuels to around 1.8 euros per litre.

This rise in the price of motor fuels has coincided with the rise in oil prices in international markets in recent weeks.

However, the price of a barrel of Brent crude, the European benchmark, is currently trading at $112.3, more than three dollars less than last week, while a barrel of Texas is selling at $95.21, which is two dollars cheaper.

Nevertheless, fuel prices in Spain remain below the EU average. In fact, the price of petrol reached 1.701 euros per litre in the EU-27 and 1.727 euros in the Eurozone. In the case of diesel, the price stood at 1.548 euros per litre in the EU-27 and 1.529 euros in the Eurozone.

Article source: Kyero.com

EU and eurozone GDP Falls 0.2% in Second Quarter

EurostatAccording to data released on Monday by the EU statistics office, Eurostat, the economy of the eurozone, and the European Union as a whole, shrank 0.2% in the second quarter compared with the first three months of 2012, when growth was zero in both zones.

In annual terms, GDP in the eurozone fell 0.4% in the second quarter compared to the same period of 2011, and that of the whole of the European Union fell by 0.2%.

The Spanish economy suffered a decline of 0.4% in the second quarter over the first quarter, and 1.0% when comparing the evolution of GDP with the same period last year.

In the second quarter of the year at least eight EU countries were in recession – there is no data available yet for them all – among them some of the largest euro economies such as Italy (with a fall of 0.7%, and 0.8% in the previous period) and Spain, with three consecutive quarters of declines.

The UK is also in recession, since its GDP contracted 0.7% in the reference period, and which now marks three consecutive quarters of negative developments.

Of the rescued countries Greece and Portugal are in recession (no data is available yet for Ireland).

In addition Cyprus, who has called on the eurozone and the International Monetary Fund for a complete rescue, accumulated four negative quarters, registering a fall of 0.8% in their GDP in the second quarter.

Romania, on the other hand, managed to emerge from recession by posting a slight increase of 0.5% between April and June, compared to the declines of 0.1% and 0.2% in the immediately preceding quarters.

Surprisingly, El Mundo reported that Finland’s economy declined by 1.0% between April and June after rising 0.8% in the first quarter. The best result was recorded by Sweden, boosting the European economy with a growth of 1.4%.

Belgium suffered the consequences of the crisis with its economy contracting by 0.6% in the second quarter, after growing 0.2% in the first, while the GDP of France remained stalled, and Germany’s rose by 0.3%.

Article source: Kyero.com

Construction Down 32.6% to May

New home construction still slowing
New home construction still slowing

During the first five months of 2012, the construction of 48,876 homes was completed in Spain. This figure represents a decrease of 32.6% over the same period in 2011 (72,606), according to data from the Ministry of Development gathered by Servimedia.

Of the total number of finished constructions, 98.5% (48,135) were allocated to private developers and 1.5% (741) to the Government. With respect to the first five months of 2011, the number of private developers’ constructions fell by 32.2% and those of public administration fell by 52.6%.

Of the constructions in the private sector, 28,988 of these homes were for commercial companies, with a year-on-year decrease of 42.1%, 13,801 were for individuals and communities of owners (-11.2%), and 3,501 were for cooperatives (-10.9%). In addition, there were completion certificates for 1,845 other private promoter works. The liquidation value of the physical execution of the works decreased by 21.3% to 6,156.3 million euros.

El Mundo reported that the number of dwellings completed in 2012 maintained the downward trend that marked the year 2011, when 167,914 homes were built, which was 34.7% less than the year before. The number of new builds in Spain have accumulated four consecutive years of declines. Since their peak recorded in 2007, with 641,419 new homes completed, the market has fallen by 74%.

Article Source: Kyero.com

Record-low Euribor will cut mortgage payments by up to 20%

Euribor rate is good news for borrowers
Euribor rate is good news for borrowers

In times of recession, social and wage cuts and rising unemployment, good news is scarce. But those citizens whose mortgages are due for review will at least reap the benefits of the descent of the Euribor. Falling interest rates and, according to analysts, the prospect that the European Central Bank are to lower them again, have led to this European mortgage index dropping to its lowest level since it began trading in 1999.

This week, the daily Euribor rate stood below 1%. Using the available data, (in the absence of data for the last two sessions confirming the last thousandth), it is calculated that the monthly index will close July at 1.062%, which means that mortgages with the longest terms will benefit from a discount of up to 20.5%.

The Euribor, which is the rate at which banks lend to each other, has now registered nine consecutive months of declines. The biggest drop, however, has been in the last month, going from 1.219% to 1.062% after the ECB decided to lower interest rates from 1% to 0.75%. Any changes in this indicator impacts on citizens who pay a mortgage, especially those who bought before the start of the crisis, and now mortgage holders whose loans are due for review can breathe a sigh of relief.

The mortgage holders who will benefit most from the falling rate are those with longer-term loans. If the loan has a duration of 30 years, for an average loan the payments will fall by 13.9%, for 40 years they will fall by 17.4% and for those who signed loans of 50 years, by 20.5%.

There is particular benefit from the descent in the Euribor, for those who signed their loan before the real estate sector began to collapse, since mortgages contracted at that time were subject to lower spreads of between 0.40 and to 0.75 points.

This won’t be the case for those who have contracted their loans in recent years or are about to do it now, because analysts believe that the much higher differentials applied to these contracts, swallow up any drop in the Euribor.

Even so, Professor of Applied Economics at the University Pompeu Fabra, José García-Montalvo, stated that in the past two months “we are seeing a contention and even a decrease in the risk premium over the Euribor”. According to the National Statistics Institute, the average interest rate at which mortgages were granted in the month of May was 4.32%, which represented a decline from the previous month.

El Pais reported that whoever buys a house now will at least have the consolation that the prices of apartments are continuing to fall, at an even faster pace, and are now 23.6% cheaper than in 2008, and that if they buy before the end of the year they may still benefit from VAT of 4% and tax relief. Nor shall they have a ground clause included in their contract, which prevented the lowering of the Euribor from a specified level.

García-Montalvo believes that the monthly Euribor will fall below 1% and notes that this circumstance will increase the disposable income of families saddled with a mortgage. However, that gain may be diminished by rising unemployment.

Member of International Financial Analysts (IFA), David Cano, said that the decline is mainly due “to cuts in interest rates and the expectation that they will fall further”, to 0.5%. Cano predicted that the index will continue to relax in the “next six to nine months,” although, in his view, the minimum levels to which the interest rates are heading, also significantly depletes the fall of the Euribor.

Article source: Kyero.com

Europe and its Institutions need to be more credible, says Montoro

Treasury Minister Cristobal Montoro
Treasury Minister Cristóbal Montoro

Spain’s Minister for the Treasury and Public Administration Services, Cristóbal Montoro, said that “we must improve the credibility of Europe and its institutions”, and defended the need to step up the reform of certain European bodies in order for them to act. The minister added that the economic crisis “has been caused by a lack of budgetary and financial discipline in several countries within the eurozone that were not warned of the risk behind such borrowing, and the failure to apply discipline”.

Cristóbal Montoro said he believes there is a need “to promote reforms in Spain and in the European institutions that do not favour opportunist operations”. The Spanish political project must fit into that “reformed and integrated” European scheme “that will lead to growth. We wish to commit ourselves to stability within that Europe”, said the minister.

In his speech in the Lower House of Parliament during the debate on the budgetary expenditure ceiling for 2013, the Minister for the Treasury said that “today, we are talking about creating a competitive Spain, with no internal imbalances, that does not depend on foreign financing and all within the framework of the European Union”. Regarding the great single currency project, he said “we are talking about strengthening the euro because Europe makes no sense without its currency”. “Europe will be created with the currency or it won’t be created at all”, added Montoro.

La Moncloa reported that, according to Montoro, next year will be the last year of recession. “There is no more time left for financing inefficient public administration services”, he said. 2013 will be “a tough year of adjustments, although the fall in activity will be more moderate” than in 2012.

A budget for recovering from recession

The minister stressed that the budget for next year is solely aimed at ending the economic recession in Spain and at setting an expenditure ceiling, “which involves each and every one of the regional governments for the first time ever”, and that forms part of the structural reforms needed by Spain. “It is not a question of losing anything but rather of gaining a present, capacity and a future”, he added.

Cristóbal Montoro also highlighted in his speech that the public deficit will be corrected in order to achieve growth and create jobs. He said there is a need to stop obtaining financing from other countries, which is what has caused the economy to falter. “We need to grow on the basis of our own financing, our own savings”. To that end, he recalled that the Government is committed to correcting the public deficit while bolstering economic activity and without incurring further job losses.

The Minister acknowledged that the risks hanging over the economy are grave, and said that “we are once again holding out a hand to the political groups. We believe in consensus, we recognise the gravity of the situation. We need to agree, commit to flexibility and to dialogue”.

The expenditure ceiling

The limit on non-financial spending by the State in 2013 was set at 126.79 billion euros, an increase of 9.2% due to the effort needed to service debt that will increase by 9.11 billion euros, and the additional 6.69 billion euros that will be needed by the Social Security system.

If these items were excluded, the expenditure ceiling would drop by 6.6% to 73.26 billion euros.

Forecast non-financial revenue for the State in 2013 amounts to 124.05 billion euros and the financing of regional governments through the expenditure budget amounts to 35.31 billion euros.

Expenditure made available to ministerial departments will be reduced by 12.2% to 31.06 billion euros.

Article source: Kyero.com

Mortgage Foreclosures Down in 2011

According to the Spanish Mortgage Association (AHE), 6.63% of unemployed workers have been affected by mortgage foreclosure proceedings since the beginning of the crisis up to the end of 2011.

The number of affected unemployed more than doubles the total percentage of households involved in foreclosures in this period, which stood at 2.46%. Taking the whole of the population into consideration, the total percentage of mortgage foreclosures since 2007 stood at 0.74%.

By region, the percentage of the unemployed population affected by mortgage foreclosure proceedings since the crisis began ranges between the 10.17% recorded in Valencia and the 3.21% of Extremadura.

According to the AHE, 77,854 foreclosure proceedings were initiated in 2011, representing a decrease of 16.9% compared to 2010 – the first drop after three consecutive years of increases. An annual decrease was recorded even though the quarterly figures showed a rise in the number of foreclosures initiated in the fourth quarter, compared with a fall in the third.

In contrast, El Mundo reported that the number of evictions continued to grow, reaching 58,241 in 2011, which represented an increase of 21% compared to 2010. As for the mortgage foreclosures, in 2011 the number of foreclosure proceedings initiated fell in all regions except in Galicia, where the number grew by 3.14%.

The largest decreases were recorded in Madrid, with a drop of 26.7%, Catalonia (-24.2%) and Castilla y León (-23.5%). At the other end, the most moderate falls were registered in the Basque Country (-0.09%), Cantabria (-2.54%) and Aragón (-6.02%). The region of Andalusia recorded the largest number of proceedings, with 21% of the total, above Valencia (19.1%), Catalonia (17.6%) and Madrid (9.7%).

Article source: Kyero.com

Spanish investors most optimistic over future of Euro

According to a study published on by JP Morgan, large private Spanish investors are the most optimistic in all of Europe about the future of the European Union.

The study, based on 325 surveys, revealed that 92% of the Spanish participants considered that the eurozone will manage to avoid any defaults in payments and that the austerity in spending will finally be rewarded.

After Spain, the other most optimistic countries are Ireland and the UK, with 90% and 85% respectively.

With regard to the opinion of high net worth investors in the eurozone, only 6% feared that a severe global depression would occur.

Also, 45% of the private European investors believe that the European equity is the most undervalued risk asset.

Meanwhile, 24% of the investors see parts of the housing sector as an investment opportunity, followed by equities (11%) and high yield bonds and oil (10%).

El Economista reported that with regard to the sectors that might perform better in 2012, investors consider these to be the technology sector, followed by the banking sector and the mining companies.

The director of strategy at JP Morgan, César Pérez, stated that although “the risk has increased” concerning European politics, they expect the markets to continue operating.

“The arrival of Mario Draghi to the Presidency of the ECB was positive for the markets because it increases the possibility that this central body could act as a last resort buyer,” he added.

Article source: Kyero.com