- Household consumption maintains a 0.5% rate and records positive rates for the third consecutive quarter
- Investment in capital goods recorded four quarters in positive and reached 2.2% in annual average
- Employment in terms of national accounting increases 0.1%, which has not happened since the first quarter of 2008
The Spanish economy recorded a 0.2% quarter-on-quarter increase in the fourth quarter of 2013, one tenth higher than in the third quarter. In annual terms, GDP decreased 0.2%, almost one point less than in the previous quarter. The year as a whole closed with an average annual decline of 1.2%, one tenth lower than expected by the Government and four tenths lower than that registered in 2012. The growth in consumption, investment in capital goods and Increased employment, driving the new stage of economic recovery.
Net external demand continued its positive evolution, although it cut its contribution to the annual growth of the product by six tenths, reaching 0.4 percentage points. On the contrary, the national demand presented a less contractual behavior, subtracting 0.6 points from growth, one point and a half less than in the previous quarter.
The lower contribution of net external demand to the annual growth of GDP was due to an acceleration of imports, much higher than that of exports. Thus, imports increased 2.7%, 2.1 points more than in the third quarter, while exports advanced 3.7%, two tenths more than in the July-September period.
In inter-quarterly terms, exports accelerated two tenths in the fourth quarter, to 0.8%, due to the greater dynamism of service exports (2.3% versus 0.3% in the third quarter) and, in particular , of non-tourist services, as the expenditure of non-residents in Spain decreased 1.5% after two quarters of consecutive advances (3.5% in the third). On the other hand, exports of goods slowed down six tenths, reaching a quarterly rate of 0.2%. Imports decreased 0.6% compared to the previous quarter, after growing 2.1% in the third quarter, a fall attributable to imports of goods (-1.2% versus 4.2% in the previous quarter). The services grew by 2.1%, after the 5.5% drop in the third quarter, due to the increase in non-tourist services, while the expenditure of residents in the rest of the world decreased 0.2%, compared to the 6.5% increase in the previous quarter.
In a more detailed analysis of the evolution of national demand, household final consumption expenditure stabilized its inter-quarterly growth rate at 0.5% from October to December. On the other hand, the final consumption expenditure of the Public Administrations was reduced by 3.9%, after increasing 0.6% in the previous quarter. Gross fixed capital formation recorded a 0.7% quarter-on-quarter increase, equal to the previous quarter. This stabilization was due to a moderation in the fall in investment in the construction sector, which went from -0.9% in the third quarter to -0.1% in the fourth and compensated for the lower dynamism of equipment investment (1.7% vs. 2.4% in the third quarter) and intangible fixed assets (1.5% vs. 4.6% in the previous quarter).
From the perspective of supply, the GVA of the services sector, the one with the greatest weight in GDP, grew again for the third consecutive quarter, 0.4% quarter-on-quarter, the same rate as in the July-September period. The VAB of the industry registered a zero variation, compared to the 0.6% increase in the third quarter, and construction moderated its inter-quarterly decline rate almost one point, to -0.4%. Agriculture, meanwhile, scored a positive rate of 3.3%, 4.6 points higher than the previous quarter.
The year-on-year rate of job destruction, in terms of full-time equivalent jobs, fell more than half in the fourth quarter, to 1.6%. In inter-quarter terms, employment registered a positive rate of 0.1%. As a result of the evolution of GDP and employment, productivity per employee slowed down seven tenths, to 1.5%. On the other hand, the salary per employee accelerated more than two points, up to 2.7%, so that unit labor costs increased 1.2% (-1.6% in the previous quarter).
Regarding nominal variables, the GDP deflator slowed down two tenths in the fourth quarter, to 0.2% year-on-year, due to the evolution of the private consumption deflator, which grew 0.3%, one point less than in the previous quarter, as well as the largest drop in the export deflator (-2.2% compared to the previous -1.4%). The AAPP consumer spending deflator increased from 0.4% in the third quarter to 3.5% in the fourth and imports decreased 1.8%, one tenth less than in the third quarter.
In the fourth quarter of 2013, the Spanish economy presented an external financing capacity of 7,815 million euros, 1,339 million euros higher than a year earlier. In terms of GDP, this implies a financing capacity close to 3%, higher than in the fourth quarter of 2012 (2.5%).
The annual average growth in activity in 2013 showed a rate of -1.2%, one tenth higher than official forecasts. The contribution of the national demand was 1.4 points less negative (up to -2.7 points) and that of the external demand was 1.5 points. The process of correction of imbalances continued with great force, so that the Spanish economy went from registering a need for financing over half a point of GDP in 2012, to a financing capacity of 1.5% of GDP. This improvement occurred in parallel to a trajectory of moderation of wage costs and prices.
In short, the national accounts of the last two quarters of the year confirm the beginning of the recovery of economic activity. The investment in capital goods takes four quarters with positive inter-quarterly rates, until reaching an annual average growth of 2.2%. Private consumption, meanwhile, has been running for three consecutive quarters with positive growth rates. These positive data are also coming to employment. The last quarter of the year was the first since the beginning of the crisis in which employment grew both in terms of EPA and national accounting and Social Security affiliations, in seasonally adjusted data in all three cases. The main indicators advanced and the composition of the demand point to a reinforcement of these trends and the recovery of production and employment during 2014.
