• External demand maintains momentum and contributes two points to growth, while national demand subtracts 3.6 points
  • Consumption tends to stabilize and investment in capital goods grows for the second consecutive quarter
  • The destruction of employment slows the decline by half a point, to 0.5%, in a context of moderation in wages and prices
  • The economy registers a financing capacity of 2.7% of GDP, compared to a need of 1% last year

According to the results of the Quarterly National Accounts (CNTR), published by the INE, the GDP in volume, corrected for calendar and seasonality, registered a quarter-on-quarter rate of -0.1% in the second quarter. This fall is three tenths lower than that of the first quarter of the year. In year-on-year terms, GDP decreased by 1.6%, four tenths less than in the previous quarter. In the euro area, quarter-on-quarter growth was 0.3%.

Net external demand continued its positive evolution, with a contribution of two percentage points to the year-on-year rate of GDP, six tenths lower than that of the first quarter. In contrast, national demand subtracted 3.6 points from growth, one point less than from January to March.

The positive contribution of net external demand to growth was a consequence of the strong increase in exports, whose yoy rate stood at 9.2%, 5.6 points higher than that of the previous quarter. Imports increased to a lesser extent, 3.1% year-on-year, compared to the 4.8% drop in the previous quarter.

In quarter-on-quarter terms, exports increased by 6% and of those, goods grew by 6.9% and services by 4%. Imports had an expansionary behavior, with an increase of 5.9%, more intense in the case of imports of goods (6.3%) than in those of services (4.5%).

Among the components of national demand, the moderation in the fall rate of final consumption of households by four tenths stands out, down to -0.1% quarter-on-quarter. Gross fixed capital formation, meanwhile, contracted six tenths more, down to -2.1%. This further weakening was due to investment in construction, which increased its contraction by eight tenths, to -4.5%, and investment in intangible fixed assets, which also fell by 4.5% after advancing by 5.5% in the first trimester. Conversely, investment in equipment grew for the second consecutive quarter, 2.9% quarter-on-quarter (0.8% in the first quarter). For its part, the quarter-on-quarter rate of consumption by Public Administrations stood at 0.9%, compared to the zero variation of the previous quarter.

From the supply side, all the main branches of activity improved in quarter-on-quarter terms except construction, which increased the rate of decline by two and a half points, down to -3.1%. Services rebounded slightly until presenting a positive rate of 0.2% (-0.3% in the first quarter) and the industry registered a null variation with respect to the previous quarter after falling three consecutive quarters. The agrarian branch, on the other hand, reduced its decrease by one tenth to -1.4%.

The annual rate of the GDP deflator reached 0.7% in the annual rate, two tenths lower than that registered in the previous quarter. This reduction is due to the slowdown in the consumption deflator, which grew by 1%, three tenths less than in the previous quarter and the fall in exports (0.5%). That of imports, meanwhile, fell more sharply to -2.2%, while that of gross fixed capital formation maintained its fall of 3.7%.

The rate of job destruction equivalent to full-time moderated in the second quarter by half a point in quarter-on-quarter terms, down to -0.5% and seven tenths, down to -3.8% year-on-year, in a context of moderation in wages and prices. As a consequence of the evolution of GDP and employment, productivity per employed person decelerated four tenths in the annual rate, to 2.2%. As the remuneration per employee reduced its rate of decline by two tenths to -0.1%, unit labor costs fell by 2.3%, compared to 2.9% in the previous quarter. The gross surplus of the economy slowed 2.7 percentage points compared to the first quarter.

The Spanish economy presented a financing capacity of 7,051 million euros in the second quarter of the year, compared to the need for financing in the previous quarter. In terms of nominal GDP, it represents a financing capacity of approximately 2.7% of quarterly GDP, which represents a substantial correction compared to the need for financing of 1% of GDP in the second quarter of 2012.

Lastly, the INE published last Tuesday the revision of the Annual National Accounts (CNA) related to the period 2009-2012, the most notable fact being the downward revision of the growth in volume of GDP of the years 2012 (two tenths) , 2011 (three tenths) and 2009 (one tenth), while 2010 revised one tenth higher. This periodic review of the CNA is standard practice for statistical offices both in Spain and in the other countries of the European Union. The data published today and that includes the second quarter of 2013 already incorporate this review.

The results of the National Accounts for the second quarter are in line with the advanced ones. They confirm the inflection in the cyclical evolution of the Spanish economy, so that positive quarterly growth rates can be expected in the second part of the year. In parallel, there has been a moderation in job destruction, in line with the second-quarter EPA. Likewise, the correction of the external imbalances of the economy has been deepened, both in the current account balance and in the financing capacity vis-à-vis the exterior, thanks in part to the strong growth in exports of goods and services. This in turn reflects corrections of internal imbalances, among which the accumulated gains in competitiveness stand out, which strengthens the foundations for the recovery expected for the coming quarters.

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