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Spain’s jobless rate drops due to tourism recovery and less temp work

Spain's unemployment rate fell in the second quarter of 2022, data showed on Thursday, helped by a recovery in the tourism sector and reforms aimed at cutting the use of temporary contracts.

Published: 28 July 2022 11:17 CEST
Spain's jobless rate drops due to tourism recovery and less temp work
The number of job seekers in Spain fell below three million in May for the first time in 15 years.(Photo by LLUIS GENE / AFP)

Unemployment edged down to 12.48 percent in the second quarter from 13.65 percent in the previous three-month period, national statistics institute INE said in a statement.

The number of unemployed people fell by 255,000 in the second quarter to a total of 2.92 million, with the services sector leading job creation, it added.

Hotels, restaurants and bars have taken on more workers as Spain’s key tourism sectors continue to rebound following the end of most pandemic travel restrictions.

The improvement in the jobless rate has also been driven by a labour market reform which came into effect on January 1st and limits the back-to-back use of temporary contracts and makes permanent contracts the rule rather than the exception.

However, there are voices from within some of Spain’s trade unions and the PP opposition party that say that the new system is “perverting the figures” and “dressing up the reality”, as although many of these contracts are labelled as permanent, employees only work during certain months of the year.

READ ALSO: Spain’s labour market buoyed by sharp drop in temporary contracts

The number of job seekers in Spain fell below three million in May for the first time in 15 years.

Economy Minister Nadia Calviño said Tuesday that the improvement in Spain’s labour market is “one of the motors” of the country’s economic growth.

She predicted Spain’s jobless rate would drop to 12.8 percent at the end of the year and to 12.0 percent in 2023.

At the same time, Calviño slashed Spain’s growth forecast due to the fallout of Russia’s invasion of Ukraine and higher interest rates.

Among western economies, Spain was one of the worst-hit by the economic fallout of the pandemic, with its gross domestic product collapsing by 10.8 percent in 2020, largely due to its heavy dependence on tourism.

Some half-a-million people lost their jobs in 2020 in Spain, which has one of the highest rates of unemployment in the OECD (Organisation for Economic Co-operation and Development).

READ ALSO: The downsides of moving to Spain for work

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WORKING IN SPAIN

Why Aragón is on its way to becoming Spain’s next Silicon Valley

Tech giants Amazon and Microsoft are both investing heavily in Spain's northeastern region of Aragón, turning it into a huge hub for data centres that will create thousands of new jobs. It's an unexpected but strategic choice.

Published: 4 July 2024 10:30 CEST
Why Aragón is on its way to becoming Spain's next Silicon Valley

In recent years, Málaga had come to be known as ‘the Silicon Valley of Europe’ after Google and hundreds more tech companies established their European headquarters in the Costa del Sol city.

This has had a huge impact on the local economy and drawn in lots of foreign talent, with some unintended consequences in the process. 

However, another region of Spain is now being favoured by some of the global tech giants: Aragón, the region which houses the city of Zaragoza.

The northeastern region is set to become a hub for international data centres, large groups of networked computer servers which are essential for big companies that depend on digital data, as they’re used for remote storage, processing, or distribution of large amounts of data.

Amazon and Microsoft have both chosen Aragón as their data centre hub for southern Europe.

Last May, Amazon’s cloud computing division AWS announced it will invest €15.7 billion in data centres in Aragón through to 2033.

The investment will reportedly create around 17,500 indirect jobs in local companies and contribute €21.6 billion to Spain’s gross domestic product during the period, Amazon said in a statement.

“This new commitment by AWS spotlights our country’s attractiveness as a strategic tech hub in southern Europe,” Spanish Digital Transformation Minister José Luis Escrivá said in a statement.

This July, Microsoft confirmed as well that it would invest heavily in Aragón, specifically €2.2 billion in a huge data centre project.

“This is great news for the Aragonese economy,” said regional leader Jorge Azcón, highlighting the economic benefits expected from this investment which he believes will have “a knock-on effect” in attracting other companies.

Microsoft had already announced in October its intention to build a data centre campus in Aragón to provide “cloud services to European companies and public bodies” without saying how much investment that would entail. Now it looks like plans definitely go ahead.

Citing figures provided by the IDC consultancy, Microsoft said the project with its 88-hectare (217-acre) campus could “contribute to the creation of more than 2,100 technology jobs in Aragón between 2026 and 2030”.

So why Aragón, a Spanish region that aside from its capital Zaragoza is vastly underpopulated and undeveloped?

One reason is that data centres require locations with a robust electrical capacity, given that data farms consume a vast amount of energy.

In that respect, Aragón is an ideal location due to its ample sunshine and strong wind exposure that have given way to both solar and wind farms.

Other factors that have worked in Aragon’s favour include its robust links to Spain’s communications networks and the region’s geostrategic location, mid-way between Madrid and Barcelona, and with other major cities such as Bilbao and Valencia within relatively close reach.

Data centres also need land. In general, data farms require a high number of hectares. The surfaces range, for example, from the 147 hectares of AWS in the Polígono Empresarium in Zaragoza to 62 hectares near the Walqa Technology Park in Huesca and an additional 44 hectares in El Burgo de Ebro.

Being a vast region (47,719 km²) , Aragón has plenty of space available, coupled with the fact that its population density of 27.8 inhabitants per square metre means that there’s lot of room to build.

Seismic activity is also a decisive factor when tech companies choose locations for data centres, with a preference for  areas in which there is less or no incidence of earthquakes to guarantee its correct functioning. Around 88 percent of the Aragonese territory has a seismic acceleration below 0.040 g, that is, an intensity threshold, which is the lowest in the whole of Spain. 

READ ALSO: What are the pros and cons of life in Spain’s Zaragoza and Aragón?

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