Spanish recovery driven by its export industry

Spanish olive oil is one of the country's most important export products

Spain’s economy recently had reason to cheer after the country’s secretary of state for trade, Jaime García-Legaz, announced that Spanish exports are set to head the European Union league table for 2013.

After years playing second fiddle to the construction industry, Spain’s exports now account for 33 per cent of the country’s GDP – a figure that is set to grow over the next few years. García-Legaz’s comments were echoed by the executive director of Spain’s Business Council for Competitiveness (CEC)…

“There’s been a change in how the Spanish economy works because now it’s based on exports and not on construction,” said Fernando Casado. “This change provides a sufficient basis for exporting gross domestic product growth in the coming year.”

With unemployment a huge concern for millions of young Spaniards, a strong export sector – while offering increased employment opportunities – threatens to suppress wages for the short to medium term. With labour costs low, multinationals have eyed Spain as a viable location for factories and distribution, moving production from eastern European countries.

But needs must. Casado told attending delegates at the ‘Spain: Land of Opportunities’ conference in Zurich that the country’s sharp economic turnaround would require a robust export sector and could lead to net growth as early as 2014.

“The labour reform must be deepened,” he said. “There needs to be a system that encourages the hiring of young people and reduces labour costs.” The reality for many young Spaniards will only be manifest once job creation kicks in proper.

Until then, the turbulent market conditions affecting most countries in the European Union cannot be avoided. Spain’s economy is going through a transition, and very few people know in which direction the country’s industry will head when it comes out the other side.

One thing is for sure, however: Spain’s tourism sector will continue to go from strength to strength. On that, you can bet your house.