The Spanish economy has grown by 3.1% year-on-year, the strongest rate in nearly eight years, and 477,400 jobs have been created

In comparison with the Eurozone average it is also reported that Spain is growing at over three times the average rate of the countries with which we share our currency. Job creation also accelerated at rate of 2.9% in the last year, leading to 477,400 new full-time equivalent jobs.

This is robust and balanced growth which is the result of the correction of accumulated macroeconomic imbalances and the reforms put in place. The contribution to economic growth of both internal and external demand has improved. Consumption and investment have contributed 3.3 percentage points to year-on-year GDP growth, two tenths higher than in the first quarter, which has added to the recovery of the Spanish economy. The external sector subtracts 0.2 points from GDP, two tenths less than in the first quarter, due to an export growth of one percentage point (to 6%), while imports subtract 0.2 points (to 7.2%), These figures show the strong dynamism of the Spanish external sector and are also consistent with the trend in internal demand.

Among the components of domestic demand we would highlight the faster growth rate of household final consumption expenditure, up by three tenths in quarter-on-quarter terms to 1%, with a year-on-year growth that remains steady at 3.5%. Meanwhile government final consumption expenditure is down by 1.3 points to a quarter-on-quarter rate of 0.4%.

Gross fixed capital formation is more dynamic, posting 2% quarter-on-quarter growth, six tenths higher than in the first quarter. This improvement is due to greater investment in capital goods and cultivated assets, up by 3.2% quarter-on-quarter, double that of the previous quarter, together with growth in intellectual property products, up by a quarter-on-quarter 0.9% in the second quarter, seven tenths higher than in the first. Meanwhile, investment in construction has slowed by two tenths to 1.4% quarter-on-quarter.

The lower subtraction of net external demand from year-on-year GDP growth is due to exports growing at a faster rate than imports, with rates of 6% and 7.2%, respectively, up by 1 and 0.2 points relative to the previous quarter. In quarter-on-quarter terms, export growth stands at 1.6%, four times the corresponding figure in the previous quarter (0.4%), while imports grew by nearly two points to 2.3%.

On the supply side, GVA (gross value added) in the services sector increased by two tenths in the second quarter, representing a quarter-on-quarter increase of 0.8%, while GVA growth in agriculture was up by 2.3 points to 2.8% quarter-on-quarter. Meanwhile GVA in industry increased by 1.4%, half a point less than in the previous quarter, while GVA in construction grew by 0.8%, six tenths less than in the previous quarter.

The year-on-year GDP deflator was positive for the second consecutive quarter at 0.6%, a tenth higher than in the first quarter. This slight growth was largely due to the upward trend in the investment deflator, which doubled to 1.2%, and the stronger growth of the export deflator (0.9%, half a point higher than in the first quarter). In year-on-year terms, construction closed the year positively (5.8% in the second quarter). Agriculture returned to positive figures (2.2%) and industry (3.5%) was up.

Finally, the upward trend in job creation that was seen last year for the first time has been maintained. The full-time equivalent job creation rate accelerated in the second quarter 2015 by one tenth in quarter-on-quarter terms to 0.9%, representing a net creation of 152,600 full-time equivalent jobs. In year-on-year terms, employment grew by 2.9%, a tenth more than from January to March, leading to the creation of 477,400 full-time equivalent jobs.

As a result of the upward trend in GDP and job creation, productivity per worker has gone from a negative year-on-year growth of 0.1% in the first quarter to a positive 0.2% growth in the second quarter. Compensation per employee dropped by six tenths year-on-year to 0.2%, causing unit labour costs (ULC) to fall by 0.1% following an increase of 0.9% in the previous quarter.