Employment will hold up in the second half of the year. It will maintain the 600,000 new jobs that were generated in the first half and will even end the year with 89,400 more jobs, reaching a new record of 21.15 million workers in Spain. This will mean that some 682,200 new jobs will be created this year compared to the 279,000 generated in 2022, with which the rate of job creation, in terms of the Active Population Survey (EPA), will double, from 1. 4% to 3.3%, according to the estimates of the Quarterly Report on Labor Market Predictions prepared by The Adecco Group Institute, the study service of this multinational human resources management company.
This also means that the Spanish labor market will continue with record employment figures at the end of the year. Previously, before the levels reached in 2023, the previous maximum employment had been reached in the third quarter of 2007, at the peak of the real estate bubble and just before the outbreak of the financial crisis, with 20,753,400 employed people.
The director of The Adecco Group Institute, Javier Blasco, explains the good progress of the activity so far this year: “The evolution of the economic and employment indicators in the second quarter have been encouraging in moments of convulsion and uncertainties at global. The services boom has fueled our positive performance, while industrial economies slow down, dragging down our dwindling manufacturing sector. The importance of foreign tourism, and of the hotel industry, as already happened in 2022, are the pillars on which this seasonal growth is based, which anticipated its peak in the month of April”.
Having said this, the cooling in the dynamism of employment in the second half of the year will be evident, as also warned by the authors of these forecasts, whose main activity in the management of temporary employment provides them with advanced indicators on the progress of the labor market. . Descending in detail by quarters, between August and October they foresee that around 107,000 jobs will be generated; to later stagnate in the last quarter —which is usually one of the worst for the Spanish market—, when they estimate that 17,600 jobs will be lost. Likewise, his calculations for the behavior of Social Security, which in this case only go up to October, point to a slight loss of some 5,600 contributors in that month compared to October. Despite this, Social Security also continues at record levels, they recall.
The unemployment rate remains
Regarding the evolution of unemployment, this document starts by recognizing that registered unemployment has been falling for 27 consecutive months, and in July its year-on-year drop was 7.1%, “but this drop is weakening”, they indicate from Adecco. According to his analysis, the reduction in the number of unemployed between May and July (-4%) is the smallest since 2012 (except 2020 due to the pandemic). From there, the experts of this company foresee for the third quarter of 2023 a quarterly drop in unemployment measured by the EPA of 0.8% to add 2,741,700 unemployed, which will mean a year-on-year cut of 8%. The forecast for the fourth quarter is for an increase of just over 40,000 unemployed —in line with the job loss estimated for the last quarter— until closing the year with some 2,782,000 unemployed and an unemployment rate of 11, 6%, identical to the current one.
According to this, the number of unemployed in Spain will remain below the psychological barrier of 3 million unemployed. Although, from Adecco, they add that to the current registered unemployed (2.6 million) 501,800 can be added with “limited availability” and other situations. If the people in ERTE and the discontinuous permanent workers who do not work are also added, the broadest definition of unemployment would reach 3.5 million people (-3%).
The cooling of the economy of which these experts speak is reflected in a stagnation of the GDP in the third quarter, for which they foresee a drop in activity of -0.1% in the third quarter of 2023 compared to the previous quarter. This variation rate is half a point lower than that of the second quarter of 2023. In this way, the interannual variation of GDP that they foresee for this quarter, which stands at 1.2%, also slows down by five tenths.
For this reason, Blasco insists that “although the Spanish economy will be one of the fastest growing this year, this does not mean that it is unaffected by the slowdown in activity that is spreading across Europe. What’s more, sales (+1.4% in the second quarter compared to +4.1 in the first) of Spanish companies and the evolution of employment mark a clear slowdown. Spain has not yet recovered its pre-pandemic GDP per capita, and it is the EU country with the lowest real GDP growth since 2019: 0.4%, compared to 0.5 in Germany, 0.6 in Italy, 0.8 for France or 1.6% for Portugal, and very far from +4.9% for Ireland”.
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