Research Dept. News
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Monthly Report, num 285 - November 2005
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Spain: overall analysis - Labour market
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Employment maintaining positive note following summer
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Employment showing stable and sustained growth at end of third quarter.
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The labour market apparently continued to show a favourable state in the final stages of the third quarter, if we are to go by information available from registrations with Social Security. Nevertheless, the process of giving normal employment status to foreign workers significantly distorts this indicator which in itself showed spectacular growth (5.6%), higher than in previous months.
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Process of giving normal job status to foreign workers ending.
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In view of the information so far available, it is not possible for the moment to accurately isolate the effect of the process of giving such normal job status. Nevertheless, it may be estimated that the rate of increase in registrations with Social Security would stand between 2.8% and 3.5%, if we discount those registrations which are not for job creation but rather for giving legal status to existing jobs. In fact, once this process is completed it may end up giving rise to the registration of 474,477 foreign workers with Social Security, workers who previously were employed outside the system. Up until July 27, those applications given approval, that is to say, which ended up having registration with Social Security, totalled 352,522. With regard to other applications filed (somewhat more than 120,000) the effect on registrations in August and September, apparently quite high, is still unknown.
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A picture closer to the trend, although with a downward bias, is available from registrations by Spanish national workers. The rate of increase in registrations in this group held at 2.0% in September, somewhat lower than in the middle months of the year while showing notable stability compared with registrations throughout the year. As a result, the trend in employment in recent months may be regarded as positive.
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The favourable state of the labour market is also confirmed by hirings registered through offices of Public Employment Services. In the first nine months as a whole, hiring contracts registered were up by 3.4% with permanent contracts showing a more positive situation than temporary contracts, in spite of the fact that the latter were in the majority. Part-time work, in turn, continued to be the hiring formula enjoying the highest growth (6.9% year-to-year) coming to represent 22.7% of all job placements.
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Registered unemployment continues slightly downward trend
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Favourable trend in registered unemployment continues after summer.
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The favourable state of the labour market may also be seen in figures for registered unemployment. The number of those registered at Public Employment Services offices in September was down slightly, which meant a change over the normal increase during this period seen in recent years. As a result, registered unemployment (2,013,286 at the end of the month) stood 1.8% below the year before.
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In spite of this improvement, the cumulative balance for the year was somewhat less favourable than in the first nine months of 2004, the best for the present decade. The notable increase in farm unemployment and the performance in industrial unemployment, with a decrease well below that for last year, would account for most of the difference. In construction and services, the cumulative decrease in unemployment came somewhat closer to the previous year although still not reaching that figure.
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By autonomous community, the improvement in the situation was especially notable in Madrid Community, the Basque Country and the Balearic Islands where the level of unemployment was substantially below that for the preceding year.
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The increasing drop in unemployment in Castile-Leon, Galicia and Catalonia, while somewhat less sharp was also appreciable. On the other hand, we note a decrease in unemployment in Extremadura, Andalusia, Aragon and Castile-La Mancha, regions where the farm sector has a relatively greater importance than in the rest of Spain’s economy.
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