Dynamism in worldwide economic growth begins to wane
December 2014.- In recent months, the growth of the world economy has been marked by the loss of dynamism in emerging economies and in Japan, as well as by the risks posed by different conflicts in the Middle East and Ukraine. The fear of deflation and slower growth in developed economies has pushed up risk premiums. However, the decline in oil prices can have a positive effect on the growth of the world’s economy.
In the euro zone, the economy has slowed down, although the Commission does not anticipate it falling back into recession. GDP growth in the third quarter was just 0.2% compared to the previous quarter. In annual terms, it increased by 0.8% compared to 1.0% in the previous quarter. At the same time, a sharp moderation in prices (0.3% in November) has taken place.
Within Spain, the increase of domestic demand is favouring growth, which was 1.6% year on year in the third quarter, compared to 1.3% in the second. Some agencies are lowering growth expectations for the whole year, given the uncertainties in the global economy and the Eurozone in particular.
In Catalonia, the Ministry of Economy and Knowledge estimates gross domestic product (GDP) growth in the third quarter at 1.8% year on year, compared to 1.6% in the second, especially thanks to the dynamism of the service sector. However, the quarterly growth was 0.5%, identical to that of the second quarter.
GDP growth (%)
Catalan industrial growth stabilizes
In this economic context, Catalan industry, which had grown briskly during the first months of the year, is stabilizing. According to the Ministry of Economy and Knowledge, the annual growth of industrial value added (GVA) in the third quarter is estimated at 1.5%, versus 1.6% in the second and 1.5% in the first.
Other indicators confirm this stabilization.
- The cumulative annual growth of the industrial production index (IPI) for the January-October period is 1.5%, just five tenths higher than in the whole of 2013. By sector, electrical materials, electrical equipment, electronics and optical material are all leading the increase in production, with a cumulative growth of 10.2% until October, followed by the sector of non-metallic minerals (8.8%) and transport equipment (7.8%).
- The industrial climate indicator (ICI) shows that business confidence in November was the highest since November 2007. However, the ICI of Spain and the European Union does show that figures are levelling off, so any Catalan data must be treated prudentially.
- Regarding industrial investment, the expected increase in the spring 2014 survey is 4.3%, the highest since before the crisis. We must wait for the results of the autumn survey to see if the moderation in growth in recent months is reflected in the forecasts of business investment for 2014.
- The industrial price index (IPRI) remains virtually stable. Annual variation in the rate is negative (-0.1% in October), ans in cumulative terms since the beginning of the year, the change is the same (-0.1%). The figure contrasts with falling prices in the euro zone (-1.3% in October).
Industrial GVA growth (%)
Jobs on the rise with unemployment decreasing
Industrial employment begins to feel the effects of the recovery in activity. In the third quarter it increased 5.3% year on year, the highest figure since before the crisis (Working Population Survey), but bear in mind that this comes after many years of dramatic job losses. Social Security registration confirms this turning point with five consecutive months of increases. This increase in employment helps to explain that the decrease in registered unemployed in industry has been at double-digit rates for eight consecutive months.
Industrial employment growth (%)
Exports increase but imports grow more than exports
Imports grew 8.7% in the cumulative period from January to September, stimulated by the expansion of domestic demand. Exports increased by 2.3% in the same period, which negatively affects the trade balance.
The energy products sector has increased its exports most during the period January to September (26.2%), followed by textile, leather and shoes. As for high-tech sectors (pharmaceuticals, computers, electronics, optical material,...), the increase was 3.0% during the first nine months of the year, compared to -0.4% for the whole of 2013.
Directorate General for Industry