During the years of economic growth and health (there was no pandemic), the hotel industry, tourism or commerce enjoyed strong growth within the Spanish economy. However, the health crisis has caused a change, which may be temporary, but which is curious and revealing to say the least. Sectors that were stagnant or showing a downward trend have led growth and job creation: agriculture, education and health have added employment and gained weight in the economy. In the worst moments is when we realize what is really important: health, food, education and housing.
Already with the 2020 GDP data practically closed, it is possible to see what the behavior of each sector has been in the calculation of the year through the added value, data published by the National Institute of Statistics and Eurostat. It is worth noting the importance of each sector of the productive fabric. Disaggregating the economy into ten broad branches of activity, it is observed that one of them grew strongly in 2020, in the midst of the pandemic that sank GDP by 11%: the branch of ‘agriculture, livestock, forestry and fishing’ expanded by 4 .7%
The crisis has been uneven. Agriculture grows and hospitality sinks
-Agriculture and Livestock. Work in this branch has been considered essential during the pandemic (it has not been affected by the lockdowns), which together with a greater consumption of food by the population during lockdown periods and the interruptions of certain external supply chains, have allowed in the midst of the crisis. So much so, that this branch of activity represented 3.4% of added value (its weight in the economy), the highest figure since 2004, over fifteen years.
In euros, agriculture, livestock, forestry and fishing produced 35,196 million in 2020, the highest amount since there are records, something normal because the economy tends to grow and each year agriculture accounts for more millions although it loses relative weight in the set of the Spanish economy. In terms of employment, agriculture ended the year with 1.152 million Social Security affiliates, some 7,000 more than a year earlier.
Agriculture did not weigh so much in GDP for 15 years
-AAPP, education and health. Another branch of activity that also expanded during 2020 was ‘public administration and defense; compulsory social security; education; health and social services activities’, which enjoyed growth of 1.4%. In addition, this branch has reached the greatest weight in GDP since there are records, exceeding 20% of gross added value in the economy, some 211,000 million euros generated in 2020. Within this branch, the employment generated by health activities stands out. added 70,000 posts (both public and private) and (between public and private).
-Financial activities. The last branch that has grown in the midst of the maelstrom of the covid has been that of financial and insurance activities, which has expanded by 2.4% during the year. A highly digitized sector that has been able to prosper even in the midst of the pandemic. However, this branch of the service sector, like agriculture, represents a relatively small part of the economy when compared to the more powerful branches of ‘public administration’ or ‘commerce and hospitality’. Financial and insurance activities account for around 46,000 million euros and around 4.5% of GDP.
Hospitality and commerce sink
-Commerce and hospitality. Outside of these two branches, the situation has been very different, with recessions of all kinds that have concentrated in a part of the service sector, the one that depends the most on social contact. The greatest collapse has been suffered by the branch ‘Wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; hospitality’, whose activity has fallen by more than 24%.
This annual drop has caused this part of the service sector to account for less than 20% (19.8%) of the economy, the lowest figure in the series, which goes up to 1995. , to which must be added the hundreds of thousands that are in Erte in this sector: only 350,000 between accommodation services and food and drink services.
From DBK they point out in their sectoral observatory that obviously, “tourism and hospitality, textiles/clothing and footwear, automotive and components, oil and leisure and cultural activities are some of the sectors most penalized by the covid-19 pandemic”.
-Artistic activities. Although the size is much smaller, we cannot forget ‘artistic, recreational and entertainment activities’, which have also suffered a 24.2% drop, these two being the branches most affected by the crisis in the service sector. This branch has gone from representing 4.8% of all added value in the economy in 2019 to 4.1% in 2020. In this branch, self-employment (self-employed) is of great importance
-Industry. Another sector that has suffered a significant drop is industry (without construction), which has experienced a 9.4% recession, a drop that has exceeded those of the same sector in much of Europe, or has even expanded . This sector has generated 166,000 million added value (GDP) in 2020, some 16,000 million less than in 2019. According to Social Security affiliation data, 60,000 jobs have been lost during the year (not counting the Erte who are considered as people employed and affiliated).
-Construction. The case of construction has been even more serious in terms of activity, although according to the affiliation data, employment has not been destroyed in aggregate terms. Construction has suffered a recession of 15.9%, higher by a few tenths than in 2010 and 2011, at the height of the bursting of the real estate bubble in Spain.
“The construction and construction materials sectors suffered in 2020 a change in the upward trend that their activity had been showing since 2015. Cement consumption, for example, fell by 9.7%, housing starts fell by 23% in the January-September period”, they explain in the DBK sector report.
The weight of this sector in GDP has fallen to 6.2%, two tenths compared to 2019. In 2020 it will generate 63,000 million added value in the economy. It is good to remember that construction reached 12% of GDP in 2006, during the peak of the housing bubble.
-Real estate activities. Related to construction is the branch of ‘real estate activities’, which fell by 3.1% in 2020, showing more strength than the economy in general. Despite the halt in construction, transactions in the real estate market, while the price of housing has barely changed in the midst of the recession. Housing seems to have gained relevance (families value their residence more now) during the pandemic, which, together with interest rates at record lows, has kept this sector alive. Real estate activities have gained almost one point of weight in GDP and stand at 12.4% of all added value in the economy.
-Information and communications. This branch has experienced a fall of 7.3%, less than the national average, which has allowed it to gain one tenth within the economy to account for 3.9% of all production in 2020. The strong digitization of the sector has could play in your favor.
-Professional and scientific activities. Another of the most affected branches has been ‘professional activities; administrative activities and auxiliary services’, which has suffered a recession of 13.9%, falling to 8.8% of all added value (a very close proxy to GDP) that the national economy generated in 2020.
In conclusion, the configuration of Spain’s GDP in the year of covid-19 has changed substantially, either due to obligation (lockdowns and restrictions) or because in the most difficult moments there is a tendency to value what is really important, boosting the consumption of those goods and services: agriculture and livestock, education, health and housing.
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