The Spanish economy is starting along the path to recovery after reaching a turning point towards positive growth in the Second Quarter
- The impetus from exports, a result of the increased competitiveness of the Spanish economy and the sharp adjustment and correction of imbalances that have already been made since the beginning of the crisis support this change.
- The improvement in economic activity and the reforms undertaken will impact positively on job creation throughout 2014.
- Indicators expect growth to accelerate in 2014, reaching 0.9%.
- The intense effort made in particular by families and businesses, which have clearly reduced their debt burden, has allowed this recovery.
- The CEC reaffirms the conclusions made in its April 2013 report, “Spain, a land of opportunities”, and highlights the fact that the recovery should start to take hold, buttressing the strengths of the Spanish economy.
- 90% of mid-size companies (those with over 250 employees) are now exporting, while only 2% of small companies (less than 10 workers) do so.
- The drag effect of Spanish multinationals will be vital in helping SMEs to grow outside of Spain and to make the leap into international markets.
- Spain is a world leader in key sectors that should serve as levers for the recovery, such as ICT, automotive, biotechnology, agribusiness and tourism.
- The CEC urges the public sector to continue its reformist efforts with particular attention on the public service, the tax system and education reform.
Madrid - The dynamism of the export sector, the global cyclical improvement and the reforms undertaken since the beginning of the crisis have made it possible for the Spanish economy in the second quarter of this year to reach the turning point in economic growth that marks the beginning of a consistent recovery.
In line with the conclusions of the report presented in April 2013, “Spain, a land of opportunities”, the Business Council for Competitiveness (CEC) reaffirms the economic prospects for Spain, and is beginning a tour of 11 cities in all the Autonomous Communities to disseminate the document “Spain: Entrepreneur and Exporter”, which in particular covers the strengths that back up the reliability and solvency of the Spanish economy.
The first of the events took place today in Madrid, at the headquarters of the CEOE, with the participation of its president, Juan Rosell, and the President of the CEC and Telefónica, César Alierta.
In the presentation, the CEC confirmed the findings of the earlier report which already announced that the second quarter of 2013 would mark the end of the recession and would serve as a clear turning point. In this regard, indicators corroborate this improvement with a forecast for positive growth in the third quarter of this year that will accelerate gradually during 2014 to reach an increase of around 1%.
The difference from previous years, the report explains, lies in domestic demand, especially consumption and investment in capital goods, which for the first time since the crisis began are showing positive growth rates, all of which will impact on the creation of employment during the second half of next year.
After presenting these forecasts, the report “Spain: Entrepreneur and Exporter” emphasises that this recovery comes after the intense efforts made by households and businesses, which have clearly reduced their debt burdens, and the public sector itself.
The CEC has urged governments to show further reinforcement of their credibility, transparency and coordination by meeting the new fiscal targets, since from this perspective the bulk of the effort has already been made, and the tax requirements necessary for them will be reduced in 2013 and 2014.
Laying the foundations for recovery
In this environment of growth, the CEC highlighted two positive aspects to this recovery that differentiate Spain from most developed countries: first, a strong reform agenda, described as meritorious by various agencies; and, secondly, some record foreign trade figures that have allowed Spain’s external accounts to move towards a clear surplus.
However, this strengthening of the foreign sector, which does create jobs, needs to lead to business investment, so the role of businesses will be crucial in ensuring the sustainability of the economic recovery.
Spain, according to the document submitted by the CEC, has prominent factors for the consolidation of this path toward recovery, which needs to continue taking root:
• An innovative business sector, with leading business schools and leading firms that invest in R&D
• A high percentage of employment among the trained population and world-renowned scientific production.
• Increased productivity with lower labour costs
• Infrastructure at the forefront of Europe and
• A key geostrategic location to access markets with great potential.
Another aspect to highlight has been the shift from a model based largely on the construction sector, labour-intensive with low added value and a low level of internationalisation, to a model that continues to rely on the tourism sector, but also on other sectors with high added value and highly qualified staff, such as automotive, biotechnology, machinery tools, ICT, the aerospace industry and the food industry in all its aspects.
These sectors have great potential and account for over a third of national GDP, over 40% of exports, and employ over 2 million professionals, besides being highly innovation-intensive industries, dedicating three times more R&D spending than other sectors of the economy.
Large Spanish multinational companies, with expertise and leadership in key global sectors, need to collaborate through the drag effect so that Spanish SMEs, especially in the areas mentioned above, where the potential for growth is high, can make the leap into the international market.
For this, it is important that these companies can grow, because their size is directly related to their ability to export: while 9 out of 10 companies with more than 250 employees are now exporting, this percentage drops to 2% in small companies with fewer than 10 workers.
To complete the foundations that underpin the economic recovery, in its conclusions the CEC stressed that it is essential to have public sector reform in all the necessary areas and for the best prospects regarding credit for SMEs to truly come to pass after the intense banking adjustment that has been made.
The CEC considers it vital to complete the reform of the government sector to make it more efficient, doing the same in the domestic market, in order to facilitate business activity around the country, to place special focus on the reforms of the fiscal and educational systems, making a special effort in the latter case to improve secondary education, which is partly responsible for the high rate of youth unemployment.
In short, the first event presenting the report “Spain: Entrepreneur and Exporter” was closed with four key messages: it is necessary to raise the pace of exports and increase productive investment, and the public sector must maintain its momentum towards reform, but the foundations have been laid for Spanish companies to be competitive and innovative, and the recession is now behind us thanks to the efforts of everyone, especially families and businesses.
About the Business Council for Competitiveness
The Business Council for Competitiveness (CEC), formed in February 2011, is made up of 15 companies and the Family Business Institute. The companies that make up the Business Council employ over 1.7 million workers, representing turnover equivalent to 35% of Spain’s GDP. The CEC was established as a think tank for the uniting of commitments and efforts in offering proposals to improve competitiveness, help economic recovery and strengthen international confidence in Spain.
Companies in the Business Council for Competitiveness: Acciona, ACS, Banco Santander, BBVA, El Corte Inglés, Ferrovial, Grupo Planeta, Iberdrola, Inditex, La Caixa, Mango, MAPFRE, Mercadona, Repsol, Telefónica
The Family Business Institute is represented by: Barceló Group, Havas Media Group, Osborne.
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.