Our economy is approaching a turning point, and runs the risk of aggravating its economic slowdown, while a rebound providential is not dischargeable. The revised data of growth translate into a loss of rhythm more pronounced than anticipated by some analysts and the Government itself. Except the unlikely event of an acceleration of the activity in the end of last year, everything points to an advance of the GDP of 1.9% in 2019. A result that, despite almost doubling the european average, it is situated half-a-point below the record of 2018.
The deterioration of the external environment —slowing of the eurozone, coupled with the cooling of international markets— is the main responsible for the slowdown, by the direct impact on exports, and its spread to the sectors more dependent on exchanges with the outside.
But also you are missing a strategy that will help the industry to weather the recession that has gripped. The expectations are negative in the short term, as shown by the main indicator advanced (PMI index of managers of purchases of manufactures), which points to a fall accelerated. The construction also suffers from the deterioration of the anticipations and the depletion of the real-estate cycle.
Growing economy
Flag advanced (composite PMI, index)
and GDP growth, at rates inreranuales
Indicator advanced (izda.)
GDP (right)
57
56
55
54
53
52
51
2,9
2,7
2,5
2,3
2,1
1,9
1,7
56,6
2,8
1,9
51,5
I T.
II T.
III T.
IV T.
I T.
II T.
III T.
O.-N.
2018
2019
Increase in the number of affiliates
Social Security
Growth year-on-year enrollees, in thousands.
Data desestacionalizados by Funcas
617,6
560,3
567,9
558,2
548,9
519,0
457,8
386,8
I T.
II T.
III T.
IV T.
I T.
II T.
III T.
IV T.
2018
2019
Sources: Markit Economics, INE,
Ministry of Labour and Funcas
THE COUNTRY
Growing economy
Indicator advanced (composite PMI, index)
and GDP growth, at rates inreranuales
Flag advanced (izda.)
GDP (right)
57
56
55
54
53
52
51
2,9
2,7
2,5
2,3
2,1
1,9
1,7
56,6
2,8
1,9
51,5
I T.
II T.
III T.
IV T.
I T.
II T.
III T.
O.-N.
2018
2019
Increase in the number of affiliates
Social Security
year on year Growth of enrollees, in thousands.
Data desestacionalizados by Funcas
617,6
560,3
567,9
558,2
548,9
519,0
457,8
386,8
I T.
II T.
III T.
IV T.
I T.
II T.
III T.
IV T.
2018
2019
Sources: Markit Economics, INE,
Ministry of Labour and Funcas
THE COUNTRY
Increase in the number of affiliates
Social Security
Growing economy
Flag advanced (composite PMI, index)
and GDP growth, at rates inreranuales
Growth year-on-year enrollees, in thousands.
Data desestacionalizados by Funcas
Indicator advanced (izda.)
GDP (right)
57
56
55
54
53
52
51
2,9
2,7
2,5
2,3
2,1
1,9
1,7
56,6
617,6
2,8
560,3
567,9
558,2
548,9
519,0
457,8
1,9
386,8
51,5
I T.
II T.
III T.
IV T.
I T.
II T.
III T.
O.-N.
R T.
II T.
III T.
IV T.
I T.
II T.
III T.
IV T.
2018
2019
2018
2019
Sources: Markit Economics, INE, Ministry of Labour and Funcas
THE COUNTRY
These results occur in spite of the expanding nature of the public expenditure, which shows an increase of close to 4.5%, one of the highest since the start of the recovery. The reverse of the medal is the deficit of the administrations, which stagnates at around 2.5% of GDP (estimate of Funcas). Excluding the payment of interest, the hole prosecutor could have been worse. To lack of specificity about the General State Budgets (PGE), it seems difficult to maintain a spending expansive in 2020, in addition to raise an issue of credibility of the budgetary commitments and debt, as there has been in recent years.
on the other hand, we confirm the symptoms of weakening of the employment. With data desestacionalizados of membership of November and December, it can be inferred that the economy is creating less than half of the jobs generated in previous exercises. Without a doubt, consumers take into account in their spending decisions in the coming months.
Despite all this, the expansion has yet to travel. And that there are signs announcing a possible recession.This tends to come from the hand of an imbalance on the side of the demand which exceeds the productive capacity (and ends up eroding the competitiveness and generating a deficit of the external accounts). Or as a result of an over-indebtedness of the private sector. None of that is happening. The external balance shows a solid surplus, one of the greatest achievements of the last few years, and inflation is very low, even lower than countries with more orthodox in terms of containment of prices. In terms of private debt, its level is currently sustainable, both for families as well as for companies, especially in an environment of interest rates close to nil.
One of the tricks most notable is the investment in machinery and equipment, which is shown resilient to the general deterioration (in the third quarter rose a strong 4%), underpinned by the favourable outlook for demand and the healthy financial situation of many companies. Another hopeful outcome is that the Spanish producers earn fees from foreign competition, both in export markets as in the internal. This circumstance could slow down the deceleration, to the extent that the external environment, and especially the european, are retrieved (something that, for now, is not guaranteed).
Put a value on these benefits is without a doubt the main feature of the economic policy for the new year. A task that necessarily involves a substantive discussion around the next PGE, to break the spiral of the deceleration.
Raymond Torres is the director of the conjuncture of Funcas. On Twitter: @RaymondTorres_
Membership
In the past month of December, the number of affiliates increased by 16.400 persons (eliminating the effect of seasonality and the non-professional caregivers), a value similar to the record of November. In these terms, the membership increased 479.000 people for the whole of the year, compared to 574,000 in 2018. Emphasizes the incorporation of foreign workers during 2019, which represent nearly one out of every three new members registered that year. On the other hand, the slowdown has impacted on all members with temporary contracts and part-time.
