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Reality hits. The Spanish economy has grown 0.6% in the second quarter of the year, a tenth of a point less than the Catalan economy in the same period (0.7%). It's also a tenth of a point less than the quarter-on-quarter growth recorded for the Spanish economy for the first three months of this year, according to figures from the National Institute of Statistics (INE). This is the lowest growth quarter-on-quarter of the last four years, namely since the second quarter of 2014 when it was 0.4%.

Spanish GDP stagnates

The year-on-year growth of Spain's GDP in the second quarter this year has seen a slowdown in the recovery, sitting at 2.7%, three tenths of a point less than the year-on-year rate for the first quarter (3%). This is the first time since March 2015 it's fallen under 3%, indeed it's the lowest seen since the fourth quarter of 2014 (2.2%).

The Spanish economy has now seen 19 consecutive quarters of positive quarter-on-quarter growth (since the fourth quarter of 2013), and 18 consecutive quarters of positive year-on-year growth. 

Source: INE / Own graph

National demand, the engine

Demand within Spain, as opposed to from abroad, remains the engine driving the economy, growing 2.9%, a tenth of a point more than the growth recorded last quarter. On the other hand, demand from abroad has dropped from 0.2% growth in its contribution to GDP last quarter to shrinking -0.2% this.

These first figures on Spain's GDP in the second quarter of the year show the first signs of the slowdown in the international economy resulting from the trade war started by the US president and a less expansive European Central Bank monetary policy.

Industry takes off

Breaking the figures down by sector, INE highlights the good performance of industry, which has grown 3% with respect to the same period last year, growth 2 tenths of a point higher than that recorded last quarter.

Within industry, when it comes to manufacturing companies specifically, they've seen growth of 3.5%, six tenths of a point more than last quarter. Construction has also seen growth, namely 6.6% year-on-year, six tenths of a point more than the first quarter of the year. Meanwhile, agriculture has seen 5.6% growth, notably higher than the 3.3% recorded last quarter.

Importantly, however, the service sector, the largest of the Spanish economy, has seen 2.1% growth with respect to last year, fourth tenths of a point less than last quarter.

Improving employment figures

Whilst the economy as a whole slows slightly, employment, in terms of full-time jobs, has increased 0.8%, three tenths of a point more than the level seen last quarter. Year-on-year, employment has grown 2.5%, a tenth of a point more than in the first quarter of the year. In real terms, it represents the creation of 448,000 new jobs over the last year.

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