Wednesday, January 02, 2013
Spain - the good, the bad and the ugly
The blue bars (left scale) show private sector percentage GDP growth, ex-construction, from 2008 through 2011. The country as a whole is slightly positive. The laggards are dominated by Valencia - the region contributing over 9 percent of Spanish GDP that saw all of its domiciled banking system nationalized and cannot, despite a favourable geographic location, an ocean port and excellent communications with the rest of Spain and Europe, find it within itself to do better than lose 3 percent of non-construction private sector output over the three years. Taking second prize in the losers competition is the considerably smaller Castilla-La Mancha. It's extremely advantageous location, bordering Madrid to the south and the east, and great highway network have done nothing to relieve it from the drudgery of a similar 3 percent loss over the period.
At the positive end of the scale, we (fortunately) find both Madrid and Cataluña - 37 percent of the country's GDP - both showing a little over 1 percent improvement in private sector growth as we define it here. Big winners are both of the tourism-dominated archipelagos of the Balearic and Canary Islands, But standing out is Navarra. Tucked in beside the Basque Country at the western end of Pyrenees, it continues to show its entrepreneurial mettle. The sad part is that it's too small to make much of a dent in the national problem.
Also notable, in our opinion, is the relatively small improvement shown by the País Vasco. We would have expected more.
The yellow bars (left scale) show the percentage that the construction industry comprised of private sector GDP in 2008 for the country and its regions. Certainly not on a case-by-case basis, but the relationship between dependence on the construction industry in 2008 and the later ability to readjust is self-evident. Might we suggest that encouraging a whole generation of young males to leave the school system, lured by the wages available to those whose skill set was mostly the ability to carry heavy objects, before they'd even learned to spell their names properly was not a very far-sighted social or economic policy. Worse yet, the main culprits appear to be doing absolutely nothing to correct this oversight.
The red bars (left scale), for interest's sake, show total GDP growth from 2008 to 2011. One region positive - Navarra.
All data from the INE's national accounts report.