This Report, which analyses the recent evolution of the national and international economy, and that of Castilla y Leon and its provinces, includes estimations of GDP growth and its components for 2019 and 2020 in the Autonomous Community, as well as related to the main variables of the labour market, with growth estimations for each province in the region.
The report highlights the following:
Economic environment (international and Spanish economies)
A loss of momentum in the growth of the global economic activity has been noticed in 2019, and this has led the main international organisms to make a downward revision of their growth forecasts for the coming years. However, it is estimated that the global Gross Domestic Product (GDP) would have reached a growth of around 3% in 2019.
In this context, even if it has been affected by the worsening foreign background, , the Spanish economy has continued with its growth path, with a rise in the production of 2%.
Economy in Castilla y León
In this context, in 3Q 2019, Castilla y León GDP fell by 0.3% quarter-on-quarter (1.0% in 2Q, without season and calendar corrections). Year-on-year, the production has grown by 2.0%, 0.4 p.p. less than in the previous quarter.
Considering its composition, from the point of view of demand, internal components have contributed 1.8 p.p. (3.0 p.p. in the second quarter).
Households’ expenditure grew by 2.3% year-on-year, 0.3 p.p. less than in the previous quarter, whereas Public Administration expenditure grew by 0,3%, and investment by 1.3%. The contribution of the external sector has been positive (0.2 p.p.), reversing the situation of the first semester of the year, due to the increase of exports (0.1%) and to the decrease of imports (-0.1%).
From the point of view of supply, the industrial sector posted a year-on-year growth higher than in the previous quarter (0.8% vs. the previous decrease of -0.3%), due to the improved path of manufacturing. However, construction and services have registered a certain slowdown in their growth path, with rates of 2.7% and 2.5% respectively.
With regard to the labour market, in the third quarter of 2019, the number of persons in employment grew by 0.8% year-on-year (0.4% in the previous quarter), underpinned by the increase in the service sector (2.6%) and in the agricultural sector (5.7%). At the same time, the working population has grown by 0.7% (0.2% in the second quarter), and the number of unemployed persons has decreased by 0.4%, with the unemployment rate standing at 11.2% (13.9% in Spain), 0.1 p.p. less than in the same period of the previous year.
For the whole 2019, and in the absence of the data corresponding to 4Q, Analistas Económicos de Andalucía forecasts a growth of 2.0% in the economy of Castilla y León, 0.2 p.p. less than in September outlook, due mainly to the reduced contribution of investment. Private expenditure would grow by 2.4%, 0.4 p.p. less than in 2018, and Public Administration consumption would increase by 1.5% and investment, by 2.7%. On the side of supply, the non-agricultural sectors would have grown at rates ranging from 0.5% in industry to 2.8% in service and construction.
As for the main variables of the labour market, a growth of 0.8% in employment is expected and higher than 2.0% in agriculture (3.1%) and services (2.3%). The number of unemployed would fall by 5.6%, with the unemployment rate standing at 11.4% as 2019 average, 0.7 p.p. less than that registered in 2018.
For 2020, the outlook expects a GDP increase of 1.7%. From the side of supply, a positive contribution by all sectors is expected, with rates ranging from 0.5% in industry to 2.1% in services. From the side of demand, a growth in expenditure is expected, both of households (2.0%) and of the public sector (1.0%), while investments could grow by 2.5%. The expected growth in employment is 1.0%, with an unemployment rate standing at 10.5% as year average.
Castilla y León provincial analysis
According to the estimations of the Activity Synthetic Indicator, during the third quarter of 2019 all provinces in Castilla y León posted positive growth rates, higher than the regional average in the cases of Segovia (2.5%), Valladolid (2.3%), Soria (2.2%), Ávila (2.2%) and Salamanca (2.1%), although these rates are not strictly comparable. For the whole 2019, the provinces of Segovia (2.3%) and Valladolid (2.2%) would exceed the regional average.
The estimations for 2020 suggest a continued growth, although lower than in the previous year. Soria (2.0%), Segovia (2.0%), Ávila (1.9%), Valladolid (1.9%) and Salamanca (1.8%) would exceed the average of Castilla y León.