Unemployment rose to its highest levels ever recorded in October last month as the figure in the Pitiusas hit 10,562, 31 per cent more than last year. The majority are registered in Ibiza (10,057), whilst 505 related to Formentera. Worryingly, the figure has almost doubled from that recorded two years ago, when just 5,565 were on the dole queue in October.
The president of Pimeef, the association for small and medium sized businesses, Mariano Riera, claimed the latest negative numbers were extremely worrying. He continued that high unemployment was directly related to the early closure of the majority of the hotels on the island, claiming the system was a chain. More closures means less work, which ensures consumer confidence slumps, which means people spend less and the economy is unable to recover, resulting in more unemployment.
The Balearics suffered a rise in unemployment during October in comparison to the previous month of 13.2%, 9,567 more people, putting the autonomous region at the top of a national table, way ahead of second-placed Castilla de la Mancha, which had 7.44%. In total by 31st October there were 81,683 people out of work in the Balearics.
The Balearic Minister for Employment, Joana Barceló, described the figures as “extremely negative”, although she hailed measures by the Central Government to ensure those families with various members on the dole were able to claim some kind of benefit.
There was no better news on a national level as Spain’s registered jobless rose for a third consecutive month in October reaching 19.3%, as stimulus spending began to run out and the boost from the busy summer period faded. The figures were inflated by the end of the tourist season, as unemployment in the service sector soared. The number of people out of work in Spain now stands at 3,808,353. Male unemployment was up by 2.8 per cent, while female unemployment was up by 2.4 per cent.
A recent Eurostat report stated that unemployment amongst people under the age of 25 climbed to 41.7% from a revised 40.9% in August, whilst the rate in the euro region was 20.1% for this group.
The report continued that unemployment in Spain would rise across the board to 20% next year and increase further to 20.5% in 2011. Currently the average figure across the 27-member EU stands at 9.2%.
The government’s €8 billion stimulus package, aimed primarily at out-of-work builders through tens of thousands of infrastructure contracts, created around 400,000 jobs this year. However, these are slowly coming to an end and many are being forced back to the dole queue. There is hope a new €5 billion stimulus package from the Government will ensure a drop in levels within the construction sector this winter, at least.
“Germany is going to come out of the crisis with the same economic model it went into the crisis, but we can’t do that,” Economy Minister Elena Salgado said during an interview on Spanish television, in which she said reducing the number of people out of work remained the priority of the Government. “We can’t, because the construction sector, which has lost almost a million jobs, is not going to return to the same levels as before. Nor would it be reasonable for it to do so. We’re suffering the effects of a bubble”.
Meanwhile it seemed the island was coping slightly better with the crisis than its near neighbours, as the Balearic Government confirmed a fall in the Gross Domestic Product of 2.4 per cent. Although still negative, the figure was substantially better than the stats of Menorca (-3.4 per cent) and Mallorca (-2.9 per cent), whilst the national average also stood at -2.9 per cent.
On the back of these results the Govern predicted the first signs of recovery would be witnessed from July 2010. However, despite the optimistic outlook, the Minister for the Economy, Carles Manera, claimed the regions GDP was likely to fall by 1.5 per cent next year, significantly higher than the national average which would be around -0.3 per cent.
However, according to a report by CRE, the Economic Research Centre, the economy had bottomed out, and would level out over the next few months. Chairman Antoni Riera explained that it was not a similar story with unemployment which he assured would rise to 100,000 in the Balearics. He explained that while no one was claiming the recession was over, or that a recovery had begun, after months of relentlessly bad news, a variety of economic and financial reports, from housing to consumer spending, suggested a bottom could be in sight.
