Spanish Manufacturing Competitiveness and Labor Market Trends
Spanish Manufacturing Competitiveness
Current Situation
The Spanish industry has shown resilience, increasing production at a higher rate than other developed economies within the EU. However, challenges persist in sustaining growth and balancing foreign trade.
Key Factors
- Growth in industrial production mainly driven by increased labor productivity, especially in the first decade.
- Since the mid-1990s, employment generation, fueled by immigration, has supported industrial growth, but productivity gains have been limited.
- Spain specializes in low-productivity industrial segments, leveraging lower wages.
- Rising labor costs pose a risk to competitiveness.
Challenges
- Enhance technological research and innovation.
- Increase worker skills and training.
- Monitor and support manufacturing activities to prevent relocation.
- Seek more flexible labor markets to facilitate transitions to more productive activities.
Productivity Evolution in Three Sectors
Industry
- Abundant supply of immigrant labor at lower wages.
- Limited innovation efforts.
- Slow adoption of new technologies.
- Skills mismatch in the workforce.
Agriculture
- Significant labor productivity gains in the past two decades.
- Increased land intensification and efficiency in labor allocation.
Services
- Labor productivity remained stagnant between 1985-2008.
- Recent slight increase in productivity per hour worked, with significant variations across sectors.
- Decline in productivity in catering, real estate, and business services.
- Stagnant productivity in transport and communication.
- Significant advances in public administration services.
Labor Market Characteristics in Spain (Mid-1980s to 2008)
Salient Features
- Increased population due to rising working-age population, higher employment rates among women, and immigration.
- Significant job creation and destruction cycles.
- Rapid rise in unemployment with cyclical changes.
Main Distinguishing Features
- High unemployment rate, exacerbated by the economic crisis.
- Lower female employment rates compared to the European average.
- High rate of temporary employment and low proportion of part-time employment.
Unemployed Characteristics
- Higher unemployment among women.
- Youth unemployment rate double the average.
- Lower unemployment with higher educational levels.
- Variations in unemployment by nationality and region.