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Spain ends spring with record-high job creation

Economy exceeds growth forecasts with nearly 470,000 new positions created between April and June

Job creation this spring has been unprecedented.
Job creation this spring has been unprecedented.

Job recovery in Spain has been better than expected this spring, with 469,900 jobs created in the second quarter. No three-month period before had ever come close to achieving such numbers. The unprecedented record means that the number of employed people now stands at 19.3 million.

Unemployment has dropped to by more than one percentage point to 15.28%

Spring is the best season for the Spanish labor market – it marks the start of the tourist high season, it is when public work projects often get underway, and when seasonal staff sign contracts. But while this combination is known to foster job creation, it had never led to such strong growth.

The unexpected performance has surprised experts who had forecast new jobs at just over 400,000. Spanish bank BBVA described the results as “greater than expected momentum” in its research analysis.

Unemployment has also dropped to its lowest level in a decade to just under 15.3%, according to the National Institute of Statistics (INE). This represents a decrease of more than one percentage point, with the number of unemployed falling by 306,000. Spain’s unemployment rate, however, continues to be high for a developed country, and it remains one of Spain’s most persistent problems in its 40 years as a democracy.

Two regions with jobless rates under 10%

Spain’s job market is struggling to return to pre-crisis levels. A decade ago the number of Spanish regions with unemployment rates over 10% were the exception. Now, however, Aragòn and Navarre are the only two regions with jobless levels below this rate. Meanwhile in Andalusia, Canary Islands and Extremadura the rate has soared past 20%.

The reason that job creation has not had a bigger effect on unemployment figures is due to the growth of the workforce, that is to say, the number of people old enough and willing to work. Between April and June, the workforce grew with unexpected vigor by 164,000 people.

Another positive change is the increase in the number of working hours, which means less precarious jobs. In three months, 650 million hours were worked – an annual increase of 5.3% and the biggest jump since Spain began its economic recovery. The increase in working hours is significantly greater than the number of jobs, meaning the quality of employment is improving.

“The upturn in job creation in the second quarter reflects the greater dynamism in construction and service industry sectors,” the Bank of Spain concluded in its analysis, which praised the private sector for generating 457,800 of the new jobs.

But the unions UGT and CC OO underscored the quality of these jobs. “Half of the employment created is temporary, and tied to seasonal activities,” noted CC OO leader Unai Sordo. Pepe Álvarez, head of UGT, also talked about the impact of seasonal jobs and said that despite the positive data, “there is still homework left to do on the employment front.”

English version by Melissa Kitson.

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