CRISIS BITES

No sign of recovery for industrial sector

Output from Spain's mines and factories has now contracted for 22 months in a row as the downturn continues to take its toll on jobs and livelihoods

Former workers at Navantia's shipyards in the southern port city of Cádiz
Former workers at Navantia's shipyards in the southern port city of CádizROMÁN RÍOS / EL PAÍS

Spanish industry continues to feel the impact of a crisis that also now gone on for five years, with the accompanying loss of thousands of jobs and the accompanying havoc this had wreaked on people's lives. 

According to figures released Thursday by the National Statistics Institute (INE), industrial output in June contracted for the 22nd month in a row. The INE's industrial production index (IPI) declined 4.6 percent in June from the same month a year earlier after a fall in May of 1.6 percent. Eliminating differences in the number of working days, output dropped 1.9 percent in June after a fall of 1.5 percent in May. In the first half of the year, production was down 3.8 percent from a year earlier.

"The fact that the sector is still stagnant is another reason to think that the recent improvement in GDP could not continue," Reuters quoted Capital Economics analyst Ben May as saying. "There have been some positive signs in Spain but I am not too sure you can arrive at the conclusion that a sustained recovery is inevitable."

Correcting for calendar effects, the big decline in output in June was in the durable goods sector where production fell 11.5 percent. Intermediate goods dropped 2.8 percent. The only positive sign was a 4.2-percent rise in capital goods, with this segment of the market boosted by an increase in the output of motor vehicles of 11.4 percent. Production of iron and steel products climbed an annual 7.2 percent. The biggest fall in production in the month was that of chemical products, which declined 26.9 percent.

The fact that the sector is still stagnant is another reason to think that the recent improvement in GDP could not continue"

The figures mark the decline of industry in Spain but did not show the human face of those who have lost their livelihood and, in some cases, hope. Despite an improvement in the labor market in the second quarter of this year, industry missed out. The number of people out of work fell below the staggering figure of over 6 million as a result of 154,000 people finding work in the services industry. However, industry shed a further 16,800 jobs.

Some regions have been more badly hit than others as is the case of Andalusia. According to the INE's Active Population Survey (EPA) for the second quarter, the number of people working in industry declined by 16,200 from a year earlier to 224,700. Since the crisis broke about five years ago, Andalusia's factories and mines have shed over 100,000 jobs.

Factories have closed and activity in some of the larger industrial companies has almost ground to a halt. That is the case of the state-owned shipyards of Navantia in the Cádiz area, which at one point provided employment to over 10,000 subcontracted workers, but now does not have enough orders to keep even its core workforce busy.

Nicolás Lavié and José Cortés, both 57 years old, Francisco Pérez, 35, and Narciso Huerta, 46, all worked at the shipyards.

Lavié had five years of uninterrupted work at the San Fernando shipyard as a result of orders placed by the Venezuelan government in 2005. He is now receiving employment benefits and will have the right to do so until 2015. When that ends, he doesn't know what he will do. "Who's going to hire someone my age," he wonders.

I know a very good electrician who is selling fish. That's what we've come to"

Cortés is asking himself the same question. After using up his unemployment benefit entitlements, Cortés now receives a safety-net payment of 425 euros a month from the government but has the consolation that his wife still has a job. Apart from the shipyards, Cortés also has experience working in power plants and renewable energy installations.

"It hasn't been easy but before there was work," he says. "It has always been difficult in Cádiz. You could spend eight months out of a job and four months working, but you could always go elsewhere. Now, there is not even that option."

Francisco Pérez, the youngest of the four, is entitled to unemployment benefits until October. Spanish workers earn the right to four months of benefits for very year worked up to a maximum of two years. Pérez needs to find a job for another week in order to earn enough Social Security credits for another four months of unemployment benefits. But as he says: "Who's going to hire me for a week now?"

The last job Pérez had was for two days in a factory in Algeciras. He went there with Narciso Huerta who does not receive unemployment benefits or the safety-net payments. The last job Huerta had was working on the construction of the second bridge connecting Cádiz and Puerto Real. He was there for a few months, but as he says: "I had the bad luck of my company going broke and sacking everyone." Many mornings Huerta goes to the gates of the construction area where the bridge is being built to hand in a resume in the hope of someone finding a job for him.

According to the EPA, the industrial sector in Andalusia had shed 29,400 jobs. Last year there were 45,000 and now 37,700. But that doesn't mean things are starting to pick up again. It is more likely that some jobs have been lost forever. "I know a very good electrician who is selling fish," Cortés says. "That's what we've come to."

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