The number of Spaniards with a job fell by more than 18 per cent between mid-2007 and the beginning of 2014. That is a staggering sum, and it helps explain why Podemos, the anti-establishment party, is expected to win a large share of the vote in Spain’s elections later this year.
The literalist explanation is that Spain’s real GDP fell about 6 per cent lower at the same time as Spanish labour productivity rose around 12 per cent. You could blame the euro crisis, the overhang of private debt, fiscal austerity, an undercapitalised banking system, and the strictures of the single currency for the former, and perhaps attribute the latter to the Spanish government’s reform programmes.
While we don’t want to dismiss the importance of policy errors and unsuitable exchange rate regimes, much of Spain’s suffering in the bust can be explained by the structure of its economy in the long boom that preceded it. On the eve of the downturn, Spain had the misfortune of looking like a Mediterranean hybrid of Nevada and Michigan. Compared to those US states, which ostensibly benefit from their membership in a functional monetary union, Spain has actually done quite well. Read more
For the nearly half-century through 2012, annual labour productivity growth in the US construction sector averaged close to zero, and it has been negative for the past two decades.
Here’s a graph constructed last year by Paul Teicholz, a civil engineer who has been working on construction technology issues for a long time and who produced the best concise analysis of the sector’s productivity that I’ve come across: Read more
CreditSights has updated its sector-specific chart to reflect this morning’s payrolls report, and you can see that construction and manufacturing employment continue to be well below their pre-recession levels, while education & health are well above and kept climbing in August. Read more
All eyes are on Poland as it hosts the Euro 2012 football championships, but as SocGen analysts have already pointed out, there’s more than just football at stake here.
The construction boom that accompanied the tournament’s preparations is believed to have been critical in supporting the Polish economy over the last few years. Read more
A chart and table via CreditSights, click to enlarge:
On Tuesday, data released by the Commerce Department indicated that residential construction had surged in November. Similar levels of housing starts hadn’t been seen for 19 months, and represented a 24.3 per cent increase from a year ago. However, the WSJ reports that this level is still only around half of the annual pace of building that would be considered healthy for the market. Much of the increase in construction came from apartments and other types of properties that tend to be rented rather than bought. The FT reported that the market’s fortune turns on single-family homes and the data for those only showed a relatively minor increase in activity.
The number of real-estate and construction companies seeking bankruptcy in England and Wales rose by 11 per cent in the third quarter as budget cuts and economic uncertainty led to canceled projects, according to research by Deloitte. Bloomberg reports that a total of 117 property companies and builders went into administration in the period, up from 105 a year earlier. Deloitte said medium-sized firms will be hurt more than larger contractors, and attributed the increase to rising energy prices and cuts to both private and public sector building projects. The next quarter would not bring any improvement, the company said.
China’s housing boom has propelled it to the top of global construction, overtaking the US for the first time, as the country ploughed more than $1,000bn into new building projects last year, reports the FT. Spending on building work in China soared during 2010 as government stimulus-fuelled demand drove up the cost of materials and labour. Meanwhile, construction prices in the US have declined steadily during the recession and the country invested $983bn last year, down from $1,500bn in 2005.
The tidal wave of analysis centring on Libya-related concerns about the soaring oil price has become an overnight growth-industry, fuelling further jitters about the fall-out from Middle East turmoil on everything from Korean construction stocks to transport companies.
In geographic terms, Italy, with its heavy exposure to Libya, “looks set to bear the brunt of a fall-out if Libya descends further into chaos”, as BreakingViews put it. Read more
There’s something about the following graphs from the Royal Institute for Chartered Surveyors Q3 UK Construction Market Survey that is beginning to give us a worrying sense of déja-vu (click to enlarge):
Again with the outperforming UK second-quarter GDP numbers.
The Office for National Statistics revised last month’s already shockingly good data upward on Friday. Read more
ConDem austerity? Bah! Volcanic ash? Bah!
These were the rather strong preliminary second-quarter UK GDP figures on Friday: Read more
Aside from generalised peripheral sovereign debt jitters, there is another reason to be scared of Spain, according to Barclays Capital’s Antonio Garcia Pascaul.
In his latest note, co-authored by Piero Ghezzi, the analyst focuses specifically on Spain’s infrastructure sector, where things are apparently getting fairly gritty. Read more
The Baltic Dry’s losing streak – now into its 28th day – is becoming old hat. But have you heard the one about the lumber futures?
As Bloomberg reported, lumber fell limit-down on the CME on Tuesday, “on declining construction in the U.S. and Canada and speculation that wood processors will not curb production, adding to already ample supplies”. Read more
WHACK! Another slap in the face for the US economy.
From Reuters on Wednesday: Read more