Unemployment increased in first quarter

Spanish unemployment
Unemployment now stands at 24.4%

Unemployment in Spain increased by 1.59 points during Q1 to 24.4%, the highest rate for 18 years, according to figures released today by the Institute of National Statistics (INE).

A further 365,900 people joined the unemployed in the first quarter, creating a total of 5,639,500 unemployed persons in Spain.

Worryingly, the number of households with all members being unemployed increased by 153,500 to 1,728,400.

Economically active population and activity rate

The economically active population experienced a decrease of 8,400 persons in the first quarter of 2012. The number of economically active persons stood at 23,072,800 persons. In interannual terms, the number of economically active persons increased by 10,900 persons.

The general activity rate remained at 59.94%, without variation regarding previous quarter. The female activity rate increased 43 hundredths, up to 53.35%, while the male rate decreased 44 hundredths, up to 66.86%.

The distance between the activity rates of Spaniards and foreign nationals exceeded 18 points, in favour of the latter, this circumstance being explained by the different age structures of both populations.

Employment 

The number of employed persons decreased by 374,300 persons in the first quarter of 2012, standing at 17,433,200.

The drop in employment affected men (278,300 fewer) more than women (96,000 fewer). By nationality, the number of employed foreign nationals decreased by 87,300, and that of Spaniards did so by 287,000.

By age, employment drop in all aged groups. By sex, the women aged between 45 to 49 years old registered the greatest increase in employment (12,400 more). In turn, the employed men aged between 25 to 29 decreased 70,200 and women aged in that group decreased 41,100.

The number of employed persons decreased in all sectors. Services registered 184,800 fewer employed persons, Construction 90,200, Industry 67,000 and Agriculture 32,300.

The number of self-employed workers increased 46,300, mainly, due to the increase of employers without wage-earners.

The number of wage-earners decreased by 418,000, of whom 138,400 had a permanent contract and 279,600 a temporary contract. The temporary employment rate decreased 1.2 points, up to 23.76%.

Part-time employment increased by 47,500 persons this quarter, whilst full-time employed persons decreased by 421,800. The percentage of persons working part-time increased almost six tenths, up to 14.73%.

The interannual variation of employment was –3.96%, seven tenths lower than that registered the previous quarter. Employment experienced a decrease of 718,500 persons in one year, 709,700 of whom were wage-earners and 9,900 of whom were self-employed workers.

The interannual job losses among men (531,700 fewer) were so much higher than those women (186,800).

Unemployment and unemployment rate

The increase in unemployment was 365,900 this quarter, standing at 5,639,500. In the last 12 months, the total figure of unemployed persons increased by 729,400 persons.

The unemployment rate rose 1.59 points, as compared with the fourth quarter of 2011, standing at 24.44%.

The increase in unemployment was almost the same for men and women.

The male unemployment rate increased 1.63 points, up to 24.09%, whilst the female rate increased 1.54 points, and stood at 24.86%. 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 increase in unemployment was 298,500 more unemployed Spaniards, against 67,400 more unemployed foreign nationals. The unemployment rate for the foreign population was 36.95%, almost 15 points higher than that of persons with Spanish nationality.

Unemployment increased in all sectors. In Services, there were 147,900 more unemployed persons, in Agriculture 59,700, in Industry 49,800 and in Construction 29,500. Unemployment also increased among those persons who lost their job over a year ago (by 66,200 more), and among those seeking their first job (by 12,800).

Mobility as related to economic activity 

The percentage of employed persons who were inactive in the previous quarter is now 4.05%, seven tenths less than that recorded in the fourth quarter of 2011.

The proportion of unemployed persons who were employed three months ago decreased two points, up to 17.18%. The percentage of unemployed persons for the first quarter of 2012 who were already unemployed three months prior increased 3.29 points, up to 67.51%. The percentage of unemployed persons who were inactive three months ago decreased 1.25 points, up to 15.31%.

Households

The number of households in which all active members were unemployed experienced an increase of 153,400, as compared with the previous quarter, standing at 1,728,400. In parallel, the number of households in which all of the active members were employed decreased by 252,300, up to 8,593,700.

In an interannual comparison, the number of households in which all active persons were unemployed increased by 342,400, and the number of those in which all active members were employed decreased by 472,300.

The full press release can be downloaded from INE here: Economically Active Population Survey – First Quarter 2012

Spanish economy contracts in Q1

The Bank of Spain has today confirmed that Spain is technically in a recession after the economy shrank by 0.4% in the first quarter of 2012, further evidence that the downturn is continuing in Spain.

Following a decline of 0.3% in the fourth quarter of 2011 a second consecutive month of economic contraction is technically a recession.

The government already knew this as they have said the economy is still shrinking and predict it will shrinnk by a futher 1.7% this year.

To try and slow the contraction they have approved labor market reforms, new banking regulations and employment law but still Mariano Rajoy’s government are warning Spain to prepare for a rough patch as things are likely to get worse before they get better. Worse than 24% unemployment? Worse than 50%+ youth unemployment? Worse than 50 billion euros of cuts? Maybe it’s time to leave Spain.

The figures released by the central bank are preliminary figures with the official GDP results due to be released by the National Statistics Institute later this month. I will of course bring you details.

Banesto net profit down 88%

Banesto
Banesto announce 88% fall in profits

As the Spanish banks announce their Q1 results Banesto have started the ball rolling with an 88% fall in profit.

The bank, controlled by Santander, reported a fall of 88% to 20.2 million euros in the first quarter of 2012, compared to 170 million in the same period last year.

Banesto said the results could be attributed to extra provisions set aside to cover bad property loans, provisions that were demanded by Mariano Rajoy’s new centre-right government, which took power last year, as part of efforts to clean up the banks’ balance sheets.

Banesto say they have 475 million euros set aside in the first quarter, which amounts to almost 50% of the amount needed to cover the whole year.

The bank have made some 365 million euros partly from the sale of shareholdings and loan assets. Without this the bank would have recorded a loss. A 4 million euro tax credit applied to the banks net profit also helped to prevent a loss.

Spanish banks have been curbing their lending of late and Banesto say their total lending fell 8.3% in Q1, as well as customer deposits which dropped 10%, the bank reported.

“The Spanish economy needs to de-leverage and the de-leveraging needs to be seen in the Spanish banks’ balance sheets,” chief executive José Antonio Garcia Cantera said, adding “We think that is going to continue for quite a while.”

Mr Cantera said the bank had sold more than 1,500 homes in March “… at an average discount that was less than the provisioning rate of 45 per cent applied to the assets.”

“That demonstrates that at a certain price there is significant demand for housing in Spain.”

Spain in recession says Bank of Spain

According to the Bank of Spain’s economic bulletin for March, the country has already slipped back into recession, as the year started with more job losses and a slow down in economic output.

“The most recent information relating to the beginning of 2012 confirms a continuation of the contraction of activity in the first quarter of this year,” the report said.

Although the bank did not give exact figures the report said the contraction was mainly due to a decline in private consumption in January and February, falling to levels not seen since 2010. New car registrations and retail sales were both down in the first few months of the year. Export growth also slowed registering an increase, but 5.4% lower than that of Q4, 2011.

Following a drop of 0.3% in the fourth quarter of 2011, and the fall in Q1 this year, Spain is, technically, already in a second recession. Two consecutive quarters of economic contraction is considered to be a recession.

After a small, but noticeable increase in output towards the end of 2011 it looked like we might miss the second recession but the poor start to this year has changed that, putting Spain back where it was this time in 2010.

This country needs some serious change to get it out of this financial battle and 27 billion in spending cuts is not the way. Where are the new jobs coming from? Where is the incentive for business investment?

Changes announced in Friday’s budget include freezing public sector workers’ salaries and reducing departmental budgets by 16.9%. That’s a good idea for saving money but is it going to help public sector workers who are currently struggling to live? With some of the highest petrol prices in Europe (on Friday I paid 150.41€ for a litre of unleaded 95) and increasing costs across the board I don’t think this will help anyone.

Deputy Prime Minister Soraya Saenz de Santamaria said the nation was in an “extreme situation” and that “Our top priority is to clean up public accounts.”

Well, there is the problem. It seems to me that the governments top priority is to look better amongst it’s EU friends, rather than helping it’s people who are losing their jobs and their homes right across this failing nation.