Spain: good labour market performance supports growth

Overall, the generally more reliable EAPS data supports the positive monthly data releases from registered unemployment and social security affiliations.

As the labour market conditions carry a significant weight in our tracking models of economic activity, and given the positive surprises, we are revising slightly upwards our GDP growth estimate for Q3 2014 from 0.3% q/q to 0.4% q/q (actually to a “high” 0.4%), still below Q2 14 when GDP grew by 0.6% q/q.

We now expect domestic demand in H2 14 to have a slightly higher contribution than we had previously projected. However, we remain cautious about the export performance of the Spanish economy as key trade partners remain very weak (including France and Italy), as recent industrial production and PMI data show. Nonetheless, we expect Spain to be the strongest growth performer within the EA4 in H2 14. Overall, our 2014 GDP forecast now stands at 1.3%, rising to 1.8% in 2015.

*The views expressed in the article are the author’s.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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