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Spain has 20 million people employed for the first time since 2008

The number of people in work in Spain is the highest in 13 years as the country's unemployment rate fell to under 14 percent in Q3 2021, new government data shows.

A hairdresser blowdries a client's hair after reopening his barber shop in Madrid, on May 4, 2020, for the first time since the beginning of a national lockdown to prevent the spread of the COVID-19 disease. - Masks became mandatory on public transport today as Spain took its first tentative steps towards a commercial reopening with small businesses accepting customers by appointment and restaurants prepping food for takeaway. Spain's population of nearly 47 million people have been confined to their homes for more than 50 days as the country sought to curb the spread of the deadly virus which has so far claimed 25,428 lives. (Photo by PIERRE-PHILIPPE MARCOU / AFP)
A hairdresser blowdries a client's hair at a barber shop in Madrid. The bulk of the new jobs are in the services sector, mainly in tourism. Photo: PIERRE-PHILIPPE MARCOU / AFP

The number of employed workers in Spain has surpassed 20 million workers for the first time since the financial crisis of 2008, after 359,300 jobs were created in the summer months of 2021, 1.8 percent more than in the previous quarter.

In September 2021, the number of people in work in Spain was 20,031 million.

The jobless rate declined to 14.57 percent in the July-September period from 15.26 percent in the previous quarter, national statistics office INE said.

The unemployment rate remains above the 13.78 percent rate recorded in the fourth quarter of 2019 before the pandemic hit Spain.

The INE jobless figures are based on surveys, which provide a more reliable indication of unemployment as many people who jobless are not eligible for benefits.

The bulk of the new jobs, 377,200, were created in the service sector which is dominated by tourism.

The industrial sector added 63,000 jobs while agriculture shed 49,600 posts.

Before the pandemic hit in spring 2020, Spain was the world’s second-most popular tourist destination after France, and the sector accounted for around 12 percent of the economy.

The Spanish government has said it was hoping to attract around 45 million tourist visits this year, approximately half the figure for 2019.

The Spanish economy contracted by 10.8 percent in 2020, one of the worst results among industrialised countries, but it returned to growth in the second quarter this year.

The statistics office is set to release gross domestic product data for the third quarter on Friday.

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LIFE IN SPAIN

Why you should think twice about buying a car in Spain, even if it’s second hand

A combination of supply and demand problems caused by the pandemic and a lack of microchips is making cars much harder to come by in Spain. Here's why you should perhaps consider holding off on buying that vehicle you had in mind for now.

Why you should think twice about buying a car in Spain, even if it's second hand

Getting your hands on a car – new, second hand, or even rental – is becoming much harder and more expensive in Spain.

The car industry has been hit by a perfect storm of conditions that have made new cars harder to come by and, as a result, caused prices to rapidly increase. 

According to Spain’s main consumer organisation, Organización de Consumidores y Usuarios (OCU), the microchip crisis affecting the entire globe, combined with an overall increase in the price of materials needed for car manufacturing and increased carbon emissions legislation has created a shortage of new cars in the country.

New cars

With less cars being manufactured, prices of new cars have gone up: a recent OCU report reports that new car prices have increased by 35 percent, higher even than Spain’s record breaking inflation levels in recent months. 

READ ALSO: Rate of inflation in Spain reaches highest level in 37 years

It is a shortage of microchips and semiconductors – a global problem – that has caused car production in Spain to plummet. In the first eight months of 2021, for example, production fell by 25.3 percent compared to 2019.

This is not a uniquely Spanish problem, however. The entire world is experiencing a shortage of semiconductor microchips, something essential to car manufacturing as each car needs between 200 to 400 microchips.

France’s car exports, for example, have fallen by 23.3 percent, Germany’s by 27 percent, and the UK’s by 27.5 percent.

Simply put, with less cars being produced and specialist and raw materials now more expensive, the costs are being passed onto consumers the world over.

Equally, these industry-specific problems were compounded by the COVID-19 pandemic.The average wait for a car to be delivered in Spain is now around four months, double what it was before the pandemic, and depending on the make and model you buy, it can be as long as a year.

Car dealerships across Spain were forced to sell cars during the pandemic to stay afloat, and now, when consumers want to purchase new cars, they don’t have enough to sell and can’t buy enough to keep up with demand due to the materials shortages that have kneecapped production.

Second-hand cars

With the scarcity and increased prices in the new car market, the effect is also being felt in the second-hand car market too. With many in Spain emerging from the pandemic facing precarious financial situations, then compounded by spiralling inflation in recent months, one would assume many would go for a cheaper, second hand option.

Yet, even second-hand prices are out of control. In Spain, the price of used cars have risen by 17 percent on average so far in 2022.

Cars 15 years old or more are 36 percent more expensive than they were in the first half of last year. The average price of a 15 year old car is now €3,950 but in 2021 was just €2,900 – a whopping increase of 36 percent.

As production has decreased overall, purchases of used models up to three years old have declined by 38.3 percent. Purchases of cars over 15 years old, on the other hand, have surged by 10.4 percent.

If you’re looking to buy a second-hand car in Spain, keep in mind that the reduced production and scarcity of new models is causing second-hand prices to shoot up.

Rental cars

These problems in car manufacturing have even passed down to car rentals and are affecting holidaymakers in Spain.

Visitors to Spain who want to hire a car will have a hard time trying to get hold of one this summer, unless they book well in advance and are willing to fork out a lot of money.

Over the past two years, since the start of the Covid-19 pandemic, there has been a shortage in rental cars in Spain. However, during peak holiday times such as Easter, the issue has been brought to the forefront.

It’s now common in Spain to see car rental companies hanging up signs saying “no hay coches” or no cars, similar to the no vacancy signs seen in bed & breakfasts and hotels.

READ ALSO: Why you now need to book a rental car in advance in Spain

While all of Spain is currently experiencing car rental shortages, the problem is particularly affecting areas of Spain with high numbers of tourists such as the Costa del Sol, the Balearic Islands and the Canaries.

According to the employers’ associations of the Balearic Islands, Aevab and Baleval, there are 50,000 fewer rental cars across the islands than before the pandemic.

In the Canary Islands, there is a similar problem. Occupancy rates close to 90 percent have overwhelmed car rental companies. The Association of Canary Vehicle Rental Companies (Aecav) says that they too have a scarcity 50,000 vehicles, but to meet current demand, they estimate they would need at least 65,000.

According to Spain’s National Statistics Institute (INE), fewer than 20 million foreign tourists visited Spain in 2020 and revenues in the sector plummeted by more than 75 percent. While numbers did rise in 2021, the country still only welcomed 31.1 million foreign visitors last year, well below pre-pandemic levels and far short of the government’s target.

Many Spanish car rental companies have admitted that the fleet they offer is down to half after selling off vehicles in the pandemic due to the lack of demand.

End in sight?

With the microchip shortage expected to last until at least 2023, possibly even until 2024, it seems that the best course of action if you’re looking to buy a new or used car in Spain is to wait, let the market resettle, and wait for prices to start going down again.

If you’re hoping to rent a car when holidaying in Spain, be sure to book well in advance.

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