Spain sees largest fall in unemployment in 20 years

Around two-thirds of jobs added in June are temporary positions, but a rising percentage are open-ended, data has revealed.

The mini job boom that arrives in Spain every summer has done so with a vengeance this year as data shows that the country added close to 84,000 new employees on to social security in June – the biggest single fall in unemployment since 1997…

The Employment Ministry has confirmed that a total of 83,993 people registered at state employment offices at the beginning of July, lowering the official jobless total for Spain to just 3.68 million.

On a month-by-month basis, July added 84,721 more people to the country’s payroll than in June, while compared to last year that number of people working in Spain is 3% higher for the month. Officially Spain has 17,844,992 people contributing to social security.

Broken down further, the bulk of these new additions – some 51,412 – came in the hotel and catering sectors, confirming the trend that sees the tourist season significantly boost Spain’s coffers during its long summer. While ordinarily a great deal of these jobs are temporary, if last year’s trend is anything to go by, the number of summer positions that become permanent or at least longer-term is likely to increase.

According to El País, 7.6% of new employment contracts signed in July – which numbered 1.81 million – were open-ended, meaning that the positions created could last longer than the holiday season. While that figure may seem low, it represents something of an uptick in confidence among the hospitality sector – a confidence fuelled by bumper visitor numbers, higher spending per head and a stronger economy, both in Spain and across much of Europe.

Marcel Jansen, a professor of economy at Madrid’s Autónoma University, said: “In general, I’d say these figures are a clear reflection of positive momentum in the Spanish economy. Quarter after quarter we’re adding employment. But when we look forward, there are reasons to expect it won’t be easy to maintain this rhythm without further reforms.”

Reforms taken over the past few years to liberalise Spain’s employment sector worked well at boosting employment, but some analysts and financial experts expect the pace of growth seen over the past two years to slow within the next 2-3 years.