SPAIN Economic Outlook - BBVA Research · RESTO DEL MUNDO AMERICA AMÉRICA LATINA CHINA min 0 max 5 5 6 6 6 6 ) Total UNIÓN EUROPEA ZONA DEL EURO - FRANCIA ... EMU Spain Some headwinds:

Spain Economic Outlook 2Q17

SPAIN Economic Outlook with view on the real estate sector

GRI 2017

JORGE SICILIA,

CHIEF ECONOMIST BBVA GROUP


Main messages

• The world economy continues to improve, albeit

within an environment in which risks are still present

• In Spain, current activity trends confirm that growth

remains strong. We expect GDP growth to remain

around 3,0% in 2017 and 2018 (2,7%).

• Housing demand is picking up, as prices have

stabilized or even increased significantly in certain

regions. Trends in construction point to the sector

finally beginning to contribute to job creation.

• Although reforms have had a positive impact, there

are still significant imbalances


Global Economic

Outlook 2ND QUARTER 2017


4

The positive dynamic takes hold

The main trends continue…

Recovery of

industrial activity and

international trade is confirmed

Financial markets rather stable

amidst growing geopolitical tension

Headline inflation continues to rise,

while core inflation remains stable

…while uncertainties take shape

A substantial growth stimulus

in the US seems less likely...

…A more protectionists’ stance

is also less likely

Central banks move

towards normalisation


0,4

0,6

0,8

1,0

1,2

Ma

r-1

4

Jun-1

4

Sep-1

4

De

c-1

4

Ma

r-1

5

Jun-1

5

Sep-1

5

De

c-1

5

Ma

r-1

6

Jun-1

6

Sep-1

6

De

c-1

6

Ma

r-1

7

Jun-1

7

5

The world's economy continues to accelerate in early 2017

Global GDP growth Forecasts based on BBVA-GAIN (% QoQ)

Confidence indicators are at

very high levels, but hard

indicators only partially reflect

that improvement

Advanced economies show

signs of strength. However,

China’s indicators signal growth

moderation in April and

emerging economies are

performing more irregularly

(e): estimated

Source: BBVA Research

CI 40% GDP growth Average for period

CI 20%

CI 60%


(e): estimated

Based on BBVA-Trade Index figures

Source: BBVA Research and CPB

6

Exports improve around the world

World exports of goods (constant prices) (YoY, %)

World trade shows signs of

acceleration, driven by investment

in China

Industrial activity partially reflects

this improvement

Consumer indicators show some

signs of slowing down 0

2

4

6

8

10

12

14

ma

r-1

1

jun-1

1

sep-1

1

dic

-11

ma

r-1

2

jun-1

2

sep-1

2

dic

-12

ma

r-1

3

jun-1

3

sep-1

3

dic

-13

ma

r-1

4

jun-1

4

sep-1

4

dic

-14

ma

r-1

5

jun-1

5

sep-1

5

dic

-15

ma

r-1

6

jun-1

6

sep-1

6

dic

-16

ma

r-1

7Exportaciones de bienes - BBVA

Mar

14

Jun 1

4

Sep14

Dec14

Mar

15

Jun15

Sep15

Dec15

Mar

16

Jun16

Sep16

Dec16

Mar

17 (

e)

Mar

11

Jun 1

1

Sep 1

1

Dec 1

1

Mar

12

Jun 1

2

Sep 1

2

Dec 1

2

Mar

13

Jun 1

3

Sep 1

3

Dec 1

3

Good exports - BBVA


-1,5

-0,5

0,5

1,5

Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17

Developed Emerging

7

Financial tension remains relatively low

BBVA financial tension index (normalised index)

Volatility has shrunk despite

the economic policy

uncertainty

Fiscal and Monetary stimulus

mask substantives concerns

In Europe, risk premia have

returned to pre-French election

levels as political uncertainty

has mostly dissipated (with

exceptions such as Italy)


China1 China2 Brexit Trump


8

Inflation shows no signs of second round effects so far

Headline and core inflation (YoY, %)

The effect of commodity prices on

inflation is reaching its maximum

level

Core inflation remains low, without

apparent second-round effects

As a result, inflation forecasts have

been lowered

Source: BBVA Research and Haver

Core inflation – World

Core inflation – Developed economies

Headline inflation – World

Headline inflation – Developed

economies

0

1

2

3

4

Jan-1

6

Feb

-16

Ma

r-1

6

Apr-

16

Ma

y-1

6

Jun-1

6

Jul-1

6

Aug-1

6

Sep-1

6

Oct-

16

No

v-1

6

De

c-1

6

Jan-1

7

Feb

-17

Ma

r-1

7

Apr-

17


9

FED and ECB interest rates (bp)

Central banks move towards a normalisation of their policies

Source: BBVA Research, FED and

ECB

0,0

0,5

1,0

1,5

2,0

2,5

en

e-1

6

ab

r-1

6

jul-16

oct-

16

en

e-1

7

ab

r-1

7

jul-17

oct-

17

en

e-1

8

ab

r-1

8

jul-18

oct-

18

FED BCE

ECB

Gradual fall in spending

ECB

End of QE. Remains

remains stable

Jan 1

6

Apr

16

Jul 16

Oct 16

Jan 1

7

Apr

17

Jul 17

Oct 17

Jan 1

8

Apr

18

Jul 18

Oct 18

FED ECB

The Federal Reserve continues to raise interest rates,

although it remains cautious about the economic

The ECB is increasingly looking at an exit strategy for monetary policy


10 Source: BBVA Research. Latin America comprises: Argentina, Brazil, Chile, Colombia, Mexico, Paraguay, Peru, Uruguay and

Venezuela

USA

2017

2.3 2018

2.4

LATIN AMERICA

2018

1.8

EURO ZONE

CHINA 2017

1.7

2018

5.8

WORLD

2018

3.4 2017

3.3

Downwards

Upwards

Remains

2018

1.7

2017

1.1

2017

6.3

Upward revision in China and the eurozone, slightly higher in Latin

America. Unchanged in the US.


Spain Economic

Outlook 2ND QUARTER 2017


Recent economic figures (e.g.

employment and exports) point

to a slightly better than expected

short-term outlook

Upward revision of 0.3pp in the

growth forecast, which now

stands at 3% for 2017

Spain: Observed GDP growth and forecasts of the

MICA-BBVA Model* (% QoQ.

(e): estimated


(*) Camacho, M. and R. Doménech (2010): “MICA-BBVA: A Factor Model of Economic and Financial Indicators

for Short-term GDP Forecasting”, BBVA WP 10/21, available at: http://goo.gl/zeJm7g

Upward bias confirmed

12

-0,5

0,0

0,5

1,0

1,5

-0,5

0,0

0,5

1,0

1,5

Ma

r-1

3

Jun-1

3

Sep

-13

Dec-1

3

Ma

r-1

4

Jun-1

4

Sep

-14

Dec-1

4

Ma

r-1

5

Jun-1

5

Sep

-15

Dec-1

5

Ma

r-1

6

Jun-1

6

Sep

-16

Dec-1

6

Ma

r-1

7

Jun-1

7 (

f)CI60% CI 40% CI 20%

GDP (%QoQ) Baseline Scenario

http://goo.gl/zeJm7g


13

Tailwinds: Monetary policy and pent-up demand are boosting

expenditure…

Source: BBVA Research based on Banco de España

(*) Consumer Situation 2H16

Consumption benefits from

expansionary monetary

policy through several

channels

Directly: lower financial

burdens and improvement

in funding conditions

Indirectly: improving

expectations about

economic growth and job

creation

Spain: Household’s financial burden (€ millions)

CF… Cambio en… Desapalancamiento CF…FB

Jun-08

FB

Dec-16 Deleveraging Change in

interest rates

130,000

120,000

110,000

100,000

90,000

80,000

70,000

60,000

50,000


14 (e): estimate, (f): forecast

Source: BBVA Research based on INE and Banco de España

The impact of fiscal

reform in direct taxation

was stronger than

expected

This increased

disposable income for

households and firms,

boosting expenditure in

2015 and 2016

Spain: Structural adjustment to the primary fiscal

balance (pp of GDP)

NEUTRAL

EX

PA

NS

ION

AR

Y

CO

NT

RA

CT

IVE

-2

-1

0

1

2

3

4

5

6

2011 2012 2013 2014 2015 2016(e) 2017 (f) 2018 (f)(f) (f)

1.6

5.3

1.8

0.1

1.0 0.9

0.1 0.1

Tailwinds: Fiscal policy turned expansionary


15

Tailwinds: Residential investment gains momentum

Spain: Social Security affiliation growth (SCA, % QoQ)

Recent figures point to the

long-awaited acceleration

in the real estate sector

Demand, along with a

reduction in oversupply,

have been the causes of

the price increases and

the uptick in activity in

certain urban areas

Source: BBVA Research based on Ministry of Employment

and Social Security figures

0,0

0,5

1,0

1,5

2,0

2,5

mar-16 jun-16 sep-16 dic-16 mar-17

Total Sector de la construcciónConstruction Sector Total

Mar-17


16

Tailwinds: Exports of goods recover, despite Brexit

The recovery in goods

exports can be explained

partly by improved

performance in emerging

markets

The euro zone continues to

bolster growth in exports,

while lower sales to the

United Kingdom has had a

relatively small impact

Spain: Exports per country (trend, %YoY)

(e): estimated

*Red and green respectively indicate

negative and positive quarterly trend variations

Source: BBVA Research based on INE figures

Se

p-1

5

De

c-1

5

Ma

r-1

6

Ju

n-1

6

Se

p-1

6

De

c-1

6

ma

r-1

7 (

e)

Total

UNIÓN EUROPEA

ZONA DEL EURO

- FRANCIA

- ALEMANÍA

- ITALIA

UE, EXTRA UEM

- REINO UNIDO

RESTO DEL MUNDO

AMERICA

AMÉRICA LATINA

CHINA

min 0 max

Se

p-1

5

De

c-1

5

Ma

r-1

6

Ju

n-1

6

Se

p-1

6

De

c-1

6

ma

r-1

7 (

e)

Total

UNIÓN EUROPEA

ZONA DEL EURO

- FRANCIA

- ALEMANÍA

- ITALIA

UE, EXTRA UEM

- REINO UNIDO

RESTO DEL MUNDO

AMERICA

AMÉRICA LATINA

CHINA

min 0 max

TOTAL

EUROZONE

France

Germany

Italy

EU, NON-EMU

United Kingdom

REST OF THE WORLD

Latin America

China

EUROPEAN UNION

Sep 1

5

Dec 1

5

Mar 1

6

Jun 1

6

Sep 1

6

Dec 1

6

Mar 1

7

Se

p-1

5

De

c-1

5

Ma

r-1

6

Ju

n-1

6

Se

p-1

6

De

c-1

6

ma

r-1

7 (

e)

Total

UNIÓN EUROPEA

ZONA DEL EURO

- FRANCIA

- ALEMANÍA

- ITALIA

UE, EXTRA UEM

- REINO UNIDO

RESTO DEL MUNDO

AMERICA

AMÉRICA LATINA

CHINA

min 0 max


17

Most of the increase in

activity comes from

improvements in

competitiveness and higher

investment.

Geopolitical tensions in

some of the competitors

steers tourism to Spanish

destinations account for

25-30% of the rise in

overnight stays by

nonresidents.

Spain: rise in the overnight stays of nonresident

tourists (2010-2015)

Due to

geopolitical

tensions 44 million

11-13 million (25-30%)

Tailwinds: Tourism remains as a positive element


0

20

40

60

80

100

120

140

1 3 5 7 9 111315171921232527293133353739414345474951

Semana del año

2013-2015 2016 2017

Bre

xi

18 Source: BBVA Research, based on Google

So far, the impact of

Brexit on Spain’s

aggregate exports has

been limited and

concentrated in exports

of goods

However, it continues to

be a risk going forward

GOOGLE searches for hotels in Spain from the UK (January average = 100)

Brexit

Tailwinds: Risks have not had the expected negative impact


19 Source: BBVA Research, based on Google

The behavior of the

investment in M&E

positively surprises and

approaches maximum

levels

Despite idle capacity in

industry persists, there

continue to be

investment

opportunities

Spain: Investment in M&E and Capacity Utilization (%)

79% 78% 82% 73%

(f): forecast

Source: BBVA Research based on INE & MINETUR

5.0

7.4

5.7

7.3

0

2

4

6

8

1995 2007 2012 2017 (f)

Share of M&E in GDP

Industry production capacity utilisation

Tailwinds: Reforms could be having a stronger impact


20


We revise our 2017 GDP growth forecast to 3%

3.2% 3.0% 2.7%

2016 2017 2018


3 2

21

1 Oil price

Despite increases

in recent months,

prices stay 40% below

2014 levels

Euro exchange rate

The euro is still depreciated

against the dollar in 2017, but

with an upward trend for 2018

Risk premium

Still low as a result of the

ECB's Asset Purchase

Programme

Global demand

Positive perspectives,

especially in the euro zone

and in emerging markets,

will drive the exports

Geopolitical tension

Tourism in Spain will continue

to benefit from the perception

of insecurity in competing

destinations

Official Interest rates

At historical lowest levels,

with expectations of

moderate increases in the

short term interest rates in

late 2018

The global context, positive for Spain

6 5 4


Brexit impact on GDP on Spanish regions (estimated deviation from baseline scenario in pp)

22 Source: BBVA Research based on INE

Some headwinds: Brexit will have an impact

More

negative


23 Source: BBVA Research based on INE and Eurostat

Spain and Europe: headline inflation (%, YoY)

2nd round

effects

remain

limited

ECB TARGET

-1

0

1

2

3

4

5

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(f) 2018(f)

EMU Spain

Some headwinds: transitory uptick in inflation


Some headwinds: interest rates will begin normalization in 2018


25 Source: BBVA Research

SPAIN

Impact of the ECB’s Asset Purchase Program on five year CDS (basis points)

0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

20 1 6 Mar-Sept

20 1 5 Mar-Dec

20 1 6 Mar-Sept

20 1 5 Mar-Dec

GERMANY FRANCE

20 1 6 Mar-Sept

20 1 5 Mar-Dec

20 1 6 Mar-Sept

20 1 5 Mar-Dec

ITALY SPAIN

20 1 6 Mar-Sept

20 1 5 Mar-Dec

PORTUGAL

Some headwinds: interest rates could begin normalization


26 Source: BBVA Research from Baker et al (2015)

Uncertainty about

Spain’s economic policy

has diminished in the

past few months

However, it remains high

Recent tax and

regulatory changes could

lead to postponement of

investment plans

Spain: effect of uncertainty on economic policy on 2017 GDP growth (pp YoY)

2016 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb

2017 DATE OF ESTIMATE

Some headwinds: policy uncertainty remains

-0.7

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

Mar Apr


90

95

100

105

110

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

PIB per cápita (base 2010=100) Nivel 2007 GDP per capita (2010=100) 27

In any event, there is still much to be done

1.2%

8.2 15.6

Unemployment rate

2007 2018

Spain: GDP per capita (2010=100)

Unemployment rate


2007 level


Real Estate

Economic Outlook 2ND QUARTER 2017


Source: BBVA Research based on INE

Spain: housing investment and employment in construction

Real Estate: Imbalances have been corrected

The sector has gone through a long and

painful period of restructuring.

Investment dropped from close to 12%

of GDP to 5% currently, while

employment went from representing

close to 14% of the total to around 6%

today.

Deleveraging by firms and households

along with the restructuring of a part of a

financial sector and price adjustment

have been key.

29

0

2

4

6

8

10

12

14

16

ma

r-8

0

no

v-8

1

jul-8

3

ma

r-8

5

no

v-8

6

jul-8

8

ma

r-9

0

no

v-9

1

jul-9

3

ma

r-9

5

no

v-9

6

jul-9

8

ma

r-0

0

no

v-0

1

jul-03

ma

r-0

5

no

v-0

6

jul-0

8

ma

r-1

0

no

v-1

1

jul-1

3

ma

r-1

5

no

v-1

6

Housing investment (% GDP)

Employment in construction (% total employment)

Averages


Source: BBVA Research based on INE and MFOM

Spain: home prices

Prices have reflected the adjustment, but now they have stabilized

30

0

20

40

60

80

100

120

0

500

1.000

1.500

2.000

2.500

ma

r-9

5d

ic-9

5se

p-9

6ju

n-9

7m

ar-

98

dic

-98

se

p-9

9ju

n-0

0m

ar-

01

dic

-01

sep-0

2ju

n-0

3m

ar-

04

dic

-04

se

p-0

5ju

n-0

6m

ar-

07

dic

-07

se

p-0

8ju

n-0

9m

ar-

10

dic

-10

se

p-1

1ju

n-1

2m

ar-

13

dic

-13

se

p-1

4ju

n-1

5m

ar-

16

dic

-16

MFOM (€/m2, izda) INE (Housing price index,dcha)

-50

-40

-30

-20

-10

0

10

20

2007-2014 2014-2016

MFOM INE

9 Q's

12 Q's

Spain: home real prices variation and # quarters in positive


Source: BBVA Research based on CIEN

Spain: home sales (thousands)

Real Estate: Home sales accumulate three years of growth

In the boom period an average of

885,500 homes were sold per year in

Spain. In contrast, in 2014 were sold just

over 300,000 homes

In the last 3 years the sales of homes

has grown 52% to 460,000 homes sold

in 2016. But this is only 53% of the sales

made each year of the expansion

Pent-up demand, lower interest rates,

increasing credit growth and job

recovery have been behind this upward

trend.

31

0

100

200

300

400

500

600

700

800

900

1.000

Avg. 2004-2007

Avg. 2008-2013

2014 2015 2016


Spain: home building permits (thousands)

Housing initiation increases but remains at very low levels

Permits decreased 96% between 2006

and 2013, from over 850,000 to over

34,000 units

Since 2014 permits have grown about

90%, but levels are still low. Permits in

2016 (65.400) represented only 7,6% of

permits in 2016

In addition, land transactions have also

increased their dynamism since 2016:

Since 2013 land area sold has increased

71,0%

32

0

100

200

300

400

500

600

700

800

Avg. 2004-2007

Avg. 2008-2013

2014 2015 2016

Source: BBVA Research based on INE


Adjustments made along with the recovery should help Real Estate

GDP growth over the coming years

ensures robust job growth and

maintaining household confidence at

relatively high levels

Housing sales growth will continue to

stimulate the construction of homes.

Finished housing will remain at very low

levels

The scarcity of new housing and the

impulse of demand point to new price

increases

0

2

4

6

8

10

12

0

100

200

300

400

500

600

2017 Prom. 2018-2020

Sales (thousand) Permits (thousand) Prices (YoY, %, right)

Spain: forecasts of Real Estate variables



Main messages

• The world economy continues to improve, albeit

within an environment in which risks are still present

• In Spain, current activity trends confirm that growth

remains strong. We expect GDP growth to remain

around 3,0% in 2017 and 2018 (2,7%).

• Housing demand is picking up, as prices have

stabilized or even increased significantly in certain

regions. Trends in construction point to the sector

finally beginning to contribute to job creation.

• Although reforms have had a positive impact, there

are still significant imbalances


SPAIN Economic Outlook with view on the real estate sector

GRI 2017

JORGE SICILIA,

CHIEF ECONOMIST BBVA GROUP


36

Forecasts


Spain EMU Spain EMU Spain EMU Spain EMU

Households final consumption expenditure 2,8 1,8 3,2 1,9 2,5 1,4 2,4 1,4

General government final consumption exp. 2,0 1,3 0,8 1,8 1,0 1,2 2,0 1,0

Gross fixed capital formation 6,0 3,0 3,1 2,5 3,3 2,5 4,5 3,0

Equipment and machinery 8,9 4,3 5,0 5,0 3,6 4,1 4,4 4,7

Housing 3,1 1,9 3,7 3,7 4,3 2,9 5,8 1,7

Other constructions 6,4 0,5 0,4 0,9 1,4 1,0 2,8 1,5

Changes in inventories (*) 0,1 -0,2 0,2 -0,1 0,1 0,1 0,0 0,0

Domestic Demand (*) 3,3 1,7 2,8 1,9 2,3 1,6 2,6 1,5

Exports 4,9 6,3 4,4 2,7 5,8 3,9 5,0 3,5

Imports 5,6 6,3 3,3 3,4 4,2 4,0 5,2 3,6

External Demand (*) -0,1 0,2 0,4 -0,2 0,7 0,1 0,1 0,1

GDP mp 3,2 1,9 3,2 1,7 3,0 1,7 2,7 1,7

Pro-memoria

Total employment (LFS) 3,0 1,0 2,7 1,3 2,6 1,1 2,6 1,0

Unemployment rate (% Active pop.) 22,1 10,9 19,6 10,0 17,3 9,5 15,6 9,1

Current account balance (% GDP) 1,4 3,2 1,9 3,3 1,8 3,0 1,5 2,9

Public debt (% GDP) (**) 99,8 90,4 99,3 89,6 97,8 88,4 95,0 86,4

Public deficit (% GDP) -5,1 -2,1 -4,3 -1,9 -3,1 -1,7 -2,1 -1,4

CPI (average) -0,5 0,0 -0,2 0,2 2,1 1,8 1,9 1,6(*) Contribution to GDP Growth

(**) Excluding aid to the banking sector in Spain

2018 (f)(% YoY)

2017 (f)2015 2016


SPAIN

Restructuring of financial sector to allow a better transmission of monetary policy

Change of legal framework and focus

on capital

Phase 1: slow paced

Focus on asset valuation,

provisions, bad bank and

capital injections (EU assisted)

Phase 2: definite

Efficiency

increased

Solvency

improved

Liquidity got

better

Credit came

back

Reduction in number of

branches since 2008 -37,3%

Ratio of Capital plus

Reserves over total

assets in 2016 (up from

5,5% in 2010) 8,7%

Loans to deposit ratio in

2017 (down from 170% in

2007) 110%

Average annual

percentage increase on

new credit flows to

families since 2014 16,8%

37


Page 38

Spain: GDP, real wages and unemployment rate* (cumulative change, SWDA ) Source: BBVA Research

-6

-4

-2

0

2

4

6

8

10

12

GD

P (

%)

Rea

l com

pen

satio

npe

r em

plo

yee

(%

)

Une

mpl

oym

ent

rate

(p

p)

GD

P (

%)

Rea

l com

pen

satio

npe

r em

plo

yee

(%

)

Une

mpl

oym

ent

rate

(p

p)

2008-09 2012-13

The 2012 Labor market reform and the 2nd Agreement on Employment and Collective

Bargaining prevented greater job destruction

Wages now seem to respond more to individual firm conditions: wage moderation

could have prevented the loss of 900,000 jobs up to 2015

There would be 2 million more jobs in the long-term if wage moderation had been

implemented at the beginning of the crisis

*/ BBVA (2016), “The role of wage flexibility in the recovery of the Spanish

labor market”, in Spain Economic Outlook, Second Quarter, 2016.

SPAIN

Effects of structural reforms on labor market performance


SPAIN

Effects of structural reforms on competitiveness

GDP deflator annual growth 2003-7

3.8% Spain vs 2.5% EU

Exports/GDP

Spain 25.5% in 1Q2008

GDP deflator annual growth 2014-16


Exports/GDP

Spain 33.8% in 4Q2016

ULC annual growth 2003-2007


ULC annual growth 2014-2016

-0.2% Spain vs 0.3% EU

39


-1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0

1997-2007

2008-2013

2014-2016

Wages Productivity Margins Taxes Total

Spain: breakdown of the inflation differential with respect to the EMU 12 based on the

GDP deflator (average annual growth)

40

SPAIN

Inflation: gains from competitiveness

Source: BBVA Research based on AMECO figures

Competitiveness gain Competitiveness loss


41

SPAIN

Economic performance highlights structural improvements

Source: BBVA Research based on INE and CF INC

Spain: Potential 2015 GDP growth by forecast date

(%)

2015 Forecasted

three years ago

0.5 Current

forecast

1.2


42

SPAIN

In the medium term, improved productivity will be a key factor

Source: BBVA Research based on Eurostat figures

The gap between Spain and the EMU in

productivity growth has decreased in

recent years

Productivity growth is still low, although in

part this might be the result of global

factors

There are some signs of structural

improvement

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1T95-4T07 3T13-4T16

Zona Euro España

Spain

3Q13-4Q16 1Q95-4Q07

Spain: Labour factor productivity (GVA per hour worked % QoQ, annualised average)

EMU


43

SPAIN

Sectoral composition shows some reasons for optimism


Productivity performance is

influenced by traditionally leading

sectors, such as ICT and

Manufacturing

Recently, other labour intensive

sectors have increased productivity,

as well as creating employment

Spain: Labour productivity factor GVA per hour worked (% QoQ, average annualised)

-4

-3

-2

-1

0

1

2

3

4

1Q

95-1

Q08

2Q

08-2

Q13

3Q

13-4

Q16

1Q

95-1

Q08

2Q

08-2

Q13

3Q

13-4

Q16

1Q

95-1

Q08

2Q

08-2

Q13

3Q

13-4

Q16

1Q

95-1

Q08

2Q

08-2

Q13

3Q

13-4

Q16

ICT Manufacturing Professionalactivities

Retail,transport andhotel industry


90

95

100

105

110

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

PIB per cápita (base 2010=100) Nivel 2007 GDP per capita (2010=100)

44

SPAIN

In any event, there is still much to be done

1.2%

8.2 15.6

Unemployment rate

2007 2018

Spain: GDP per capita (2010=100)

Unemployment rate


2007 level

Skill mismatch in the labor market Productivity enhancing measures

Documents

SPAIN Economic Outlook - BBVA Research · RESTO DEL MUNDO AMERICA AMÉRICA LATINA CHINA min 0 max 5 5 6 6 6 6 ) Total UNIÓN EUROPEA ZONA DEL EURO - FRANCIA ... EMU Spain Some headwinds: