• GDP increases 3.4% in year-on-year terms in the first quarter, almost two points higher than the euro zone average
  • The composition of growth is more balanced with a national demand contribution of 3.8 points
  • Job creation accelerates two tenths, up to 3.2%, the highest rate since the second quarter of 2007

The Spanish economy registered 0.8% quarter-on-quarter growth in the first quarter of 2016, as in the previous two quarters and three tenths higher than in the euro zone. In year-on-year terms, GDP increased 3.4%, one tenth less than in the previous quarter and almost two points more than that of the euro zone (1.5%). Job creation grows 0.9% in the quarter and 3.2% compared to a year ago, which translates into the creation of 533,000 full-time equivalent jobs in the last twelve months.

The composition of growth is more balanced, with a contribution from national demand to the annual GDP growth of 3.8 percentage points, three tenths less than in the previous quarter, and a contribution of net external demand of -0.4 points , two tenths less negative than the previous quarter.

In inter-quarterly terms, among the components of the national demand, the highest rate of progress in final household consumption expenditure stands out, one tenth to 0.9%, while gross fixed capital formation slows down seven tenths, recording a rate 0.4% The slowdown in investment is explained by the lower dynamism of investment in capital goods and intellectual property products, which have reduced their growth rate by six tenths and one point, respectively, up to 1.3% and 0 , 2%, as well as the fall in investment in construction (-0.2%), after almost two years of uninterrupted increases (0.6% in the fourth quarter of 2015). On the other hand, the final consumption expenditure of the Public Administrations increased 0.8% in the first quarter, four tenths more than in the previous quarter.

The lower detraction of net external demand The year-on-year growth of GDP is explained by a deceleration of imports greater than that of exports. Thus, exports increased 3.7% compared to the first quarter of 2015, 1.6 points less than in the previous quarter, and imports advanced 5.4% year-on-year, 2.3 points less than in the last quarter from last year

In inter-quarter terms, exports decreased 0.5% in the first quarter, after more than two years of continuous increases (0.9% in the fourth quarter of 2015) and imports maintained the stabilized rate of progress at 0 ,3%. In turn, the fall in exports was due to the contraction of service exports, which decreased 1.7%, while exports of goods registered a zero variation rate.

From the supply perspective, the Gross Value Added (VAB) of the industry increased 0.7% quarter-on-quarter in the first quarter of the year, four tenths more than in the previous quarter, and the VAB of the services sector accelerated three tenths, up to 0.9%. On the contrary, the GVA of the construction went from growing 1.5% in the last quarter of 2015 to practically stabilizing (-0.1%), and the GVA of agriculture registered a negative rate (-1%), compared to to the 2.7% increase of the previous quarter.

The inter-quarterly rate of job creation, in terms of full-time equivalent jobs, increased three tenths in the first quarter, to 0.9%. In inter-annual terms, employment accelerated two tenths, up to 3.2%, the highest rate since the second quarter of 2007. This represents a net increase of 533 thousand full-time equivalent jobs in the last twelve months. As a result of the evolution of GDP and employment, productivity per employee moderates three tenths the annual growth rate, up to 0.2%. On the other hand, the salary per employee is reduced by 0.3%, after an increase of 0.9% in the fourth quarter of last year, so that unit labor costs decrease 0.5%, compared to the increase of 0 , 4% of the previous quarter.

The annual rate of GDP deflator was in the first quarter of 2016 in negative territory (-0.2%), after four quarters of consecutive increases. This fall is mainly explained by the decrease in the consumption deflator (-0.7%) and exports (-1.7%).

Nominal GDP slowed down more than one point in the first quarter, to record an interannual rate of 3.2%, compared to the 4.3% increase in the previous quarter. Regarding the primary distribution of income, this deceleration is due to the evolution of its three main components. The remuneration of employees grew 3.2% year-on-year, 1.1 points less than in the previous quarter, gross operating surplus / mixed income slowed down one point, recording a 2.5% growth, and net taxes of subsidies on production and imports moderated the rate of progress nine tenths, to 6.4%.



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