The Spanish economy grows by an annual 3.4%, the highest rate in nearly eight years, and creates 511,600 jobs

This growth rate is the highest since the fourth quarter 2007; that is to say, a year before the recession of the Spanish economy kicked in. Job creation grew by an annual rate of 3.1%, one tenth higher than in the second quarter, and 511,600 jobs were created with compensation per employee growth of 0.3% in a context of falling prices.

National accounting data for the third quarter of the year show that the Spanish economy is sustaining a strong growth rate which is bettering its main European partners. Versus the average 0.3% of the Eurozone as a whole, the same percentage for Germany and France and a tenth less in the case of Italy, the Spanish economy has posted a quarter-on-quarter growth of 0.8%. Spain has therefore posted more than two years of consecutive growth, after having accumulated negative or close to zero rates since the end of 2008, when the longest and deepest recession in Spain's recent history took hold.

Year on year growth was 3.4%, the highest rate since the fourth quarter 2007; that is to say, one year before the recession started. This represents a two tenths acceleration over the second quarter. The main contribution to growth comes from domestic demand (3.9 points), while the external sector shrinks by half a point. Within domestic demand it is private consumption that most drives the economy (2 points), followed by investment (1.3 points).

With regard to domestic demand and in respect of the last twelve months, we should note the growth of gross fixed capital formation (6.5%), in particular capital goods (10.6%) and, to a lesser extent, construction (5.5%). Investment in construction has therefore posted positive figures six quarters back-to-back. Meanwhile, household consumption was up by 3.5% in the last year, the strongest growth since positive rates started to be posted in the first quarter of 2014, and also the highest since the fourth quarter of 2016. With regard to external sector, exports continue to be buoyant, with 5.6% growth over the previous year, versus a 7.7% increase in imports.

The job creation trend measured in terms of full time equivalent jobs yields a net job creation of 511,600 jobs. This figure represents a 3.1% improvement over last year, one tenth higher than in the previous quarter, and the sixth consecutive positive quarter. The annual rate is also the highest since the third quarter 2007. Compensation per employee grew by a 0.3% year on year, one tenth lower than in the second quarter, in a context of negative inflation, which enables gains to be made in purchasing power.