• External demand maintains momentum and contributes 2.4 points to GDP, while national demand subtracts 4 points
  • Job destruction slows to 0.8% quarter-on-quarter, with a loss of 788,500 jobs in the past year

The Spanish economy contracted 0.3% in the third quarter of 2012 compared to the previous quarter, thus moderating the rate of decline by one tenth (-0.4% in the second quarter). In year-on-year terms, GDP fell 1.6%, two tenths more than in the previous quarter.

Despite the contraction in activity, the figures for the third quarter reflect positive aspects. On the one hand, the fall in activity is less intense than expected. On the other hand, there have been significant improvements in the competitiveness of the economy, exports of goods and services have evolved positively, and financing capacity has been achieved compared to the rest of the world, which represents an unprecedented change of sign in recent years . These factors are at the base of the future recovery of the Spanish economy.

Net external demand continued its positive evolution, with a contribution of 2.4 percentage points to the year-on-year rate of GDP in the third quarter, equal to that of the preceding period. Meanwhile, national demand subtracted 4 points from growth, two tenths more than in the second quarter.

The positive contribution of the external demand net growth is a consequence of the acceleration of exports, which increased by 4.3% annually (1.4 percentage points more than in the second quarter), derived both from the improvement in exports of goods (3.7%) and services (5.5%) . At the quarterly rate, this export dynamism was even clearer, as it went from increasing 1.7% in the previous quarter to 4.8% in the third. For their part, imports they decreased 3.5% year-on-year, 1.6 points less than in the previous quarter. Over the previous quarter, imports increased by 2.4%, which contrasts with the 1.3% drop in the second quarter. The boost experienced by both exports and imports explains the stabilization of the contribution of external demand to annual GDP growth.

Among the components of the national demand, highlights the moderation in the rate of decline in final household consumption half a point, down to -0.5% quarter-on-quarter. The gross capital formation fixed, meanwhile, fell 1.6 points less, down to -1.4%. This minor weakening was due both to the investment in equipment, which grew 0.6% quarter-on-quarter (-1.8% in the second quarter), as at construction investment, which moderated its contraction by 1.1 points, to -2.8%. In contrast, the quarter-on-quarter variation rate of consumption of the Public Administrations it stood at -2.4%, 1.8 points lower than the previous quarter. This evolution is consistent with the expected intensification of the process of fiscal consolidation of Public Administrations during the second half of the year, an evolution necessary for achieving the budgetary objectives set by the Government for this year.

From the supply side, among the main branches of activity, the services and the agrarian branch They presented positive quarter-on-quarter variations of 0.4% and 0.8%, respectively, representing improvements in their rates of 0.6 and 1.2 points compared to the previous quarter. However, the building and the industry They intensified the rate of quarter-on-quarter decline (more clearly the first and only slightly the second), to stand at -3.4% and -1% respectively.

The rate of destruction of job in the third quarter it eased by one tenth both in quarter-on-quarter and year-on-year terms, reaching -0.8% and -4.6%, respectively. In the past year, 788,500 full-time jobs have been lost. As a consequence of the evolution of GDP and employment, productivity per employed person decelerated 4 tenths in the annual rate, to 3.1%. Compensation per employee remained stable in annual terms, which together with the evolution of productivity caused a significant annual drop in unit labor costs (3%). This is a positive factor in prolonging the trend of increasing foreign competitiveness that the Spanish economy has been showing.

In the third quarter of the year, the economy registered a external financing capacity of 3,243 million euros, compared to needs of 6,075 million euros a year earlier. In terms of GDP, it represents a financing capacity of 1.3%, which represents a substantial correction compared to the financing need of 2.4% of GDP in the third quarter of 2011. Since the beginning of the current accounting series ( year 2000), the third quarter of 2012 is the first in which the Spanish economy reaches financing capacity and enables one of the main imbalances that characterized the previous growth phase to be corrected.

The INE has revised its series for the first and second quarters of 2012. As the most relevant data from this review, the growth estimate for the first quarter of 2012 stands out, which goes from -0.3% to -0.4% in quarterly rate and -0.6% to -0.7% in annual rate. Regarding the second quarter, despite maintaining the quarterly rate at -0.4%, the annual rate varies from -1.3% to -1.4%. With this, the average annual GDP growth in the three quarters of the year is -1.2%.



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