Executive Search in Spain – 2015  Outlook

Recovery Comes To Spain, But Little Joy

After five years of double-dip recession and rampant job destruction, Spain’s downward lurch has stopped and executive search in Spain is building again.  Growth has returned: the Madrid stockmarket is euphoric, government-bond yields have tumbled below pre-crisis levels and foreign investors are bargain-hunting. “Spain is back,” trumpeted JPMorgan Chase, a bank, in a recent report.

Yet GDP growth, estimated at 0.3% in the fourth quarter, is neither as vigorous nor as ironclad as it was claimed.  Analysts predict a measly 1% expansion in 2014 as the economy is held back by heavy private debts.  The IMF puts Spain near the bottom of its global growth chart for two years.  And, as wages fall and a quarter of workers remain jobless, most Spaniards have yet to notice the uptick

The brakes are still on

Another period of dramatic decline is unlikely, unless markets get euro-crisis jitters again.  Growth in manufacturing and services is creating new jobs, and consumer demand is creeping back.  But many brakes remain on growth and job creation.

Banks, businesses and families are still shedding their debts, keeping money out of the economy.  And as private debt falls, public debt surges.  The government probably missed even its relaxed target for the 2013 budget deficit of 6.5% of GDP.  Public debt, which was below 40% of GDP when the crisis hit, will rise above 100% next year, leaving Spain more vulnerable to future shocks.

Salaries are falling and, with unemployment so high, are unlikely to bounce back soon.  Employment remains the main worry.  With salaries stuck, new job creation is the best way to boost consumer demand.  It also has the benefit of reducing spending on unemployment subsidies.

Unemployment stuck at 20+%

A bumper tourist season and good harvest helped create temporary jobs in the summer and autumn; the public payroll grew in education and health, despite the deficit. Yet unemployment will stay stuck above 20% for several years.  Recovery may be here, but joy will be a long time coming.

As headhunters, we are  experiencing an increase in the number of searches compared to the last three years. This is good news but we are all very cautious as we are not sure this will continue…