Market
workAs we have seen in previous installments in this series (the first on the number of operations housing sales and the second on the developments price per square meter in both new buildings such as used), there is a high degree of rigidity (low responsiveness) in housing prices to a collapse in demand that occurred in 2006, what we see now is whether this rigidity in income is a structural feature of the sector or, by contrast, is merely an act of opportunity.
begin with the most striking feature of this sector, is the high seasonality in labor contracts, the National Statistics Institute not provide data disaggregated by provinces regarding the timing, but we serve the global data for the whole of Spain. Keep in mind that both the classic construction (details of which were already listed individually in the above statistics INE) and the promotion of commercial and real estate (APIs) have been integrated with the new NACE classification (National Code of Economic Activities) in the construction sector.
As shown in figure upper half of temporality in Spain was between 30% and 35% through the first quarter of 2008 (not dropped below 5 million workers to the second quarter of 2008), although it started to be in the bottom of this range from the first quarter of 2007 after having reached its maximum (34.59%) in the third quarter of 2006, though a temporary high compared with neighboring countries, the construction sector came to 56.98 % of temporality in the third quarter of 2006.
Since the third quarter of 2006 (when there were 5,661,400 workers on temporary contracts) to the first quarter of 2010 have disappeared 1,940,900 temporary contracts while unemployment has increased by 2,960,900 people (have entered the labor market other 1,346,200 people, have increased to 828,200 permanent contracts and the rest, another 500,000 lost jobs at non-corresponding wage-employed persons, employers, business ... -), only in the construction industry has gone 710,000 temporary jobs since it will hit its peak in absolute numbers (1,218,500 contracts in the second quarter of 2007) while unemployment has come to increase by more than 600,000 people (before the Plan-E and the decline of the working population 476,800 construction workers have stopped looking for work in the field or have gone to swell the bulging list of long-term unemployed, who are not assigned a specific sector, should give some respite to the terrifying figures of statistics).
Both the numbers of time as the unemployed (from the second quarter of 2007 the unemployment rate in building fires, both in Spain and, especially, in Castellón), we note that that rigid to adapt the sales prices of homes there is apparently no time to reduce labor costs, however, not forget that companies are promoting (the last link in the chain of costs) and not the building (that being the first link was the first time not to renew their contracts with the increasing inactivity of the sector, although it impacted their costs to the next link), which set up these prices, so that adjustments can hardly be immediate.
The labor market situation in Castellon real estate is much more critical than in the rest of Spain, to be the Castellon sector with a lower rate of unemployment (having just reached 1.64% in the second quarter of 2007 ) has come to break all known figures, coming in today to have an unemployment rate of 32.92%, although the figures of the sector in Spain are also triggered (5.50% rate of unemployment in the sector in the third quarter of 2005 has reached to 27.32% during the first quarter of 2009), the weight of the sector in Castellón province has made the pass to be one that best overall unemployment figures presented (usually two or three percentage points below the national average) to be one that presents an unemployment rate more runaway (over 26% today, almost five percentage points above the overall figures for Spain).
The importance of the construction sector in the province of Castellón can be observed in the last graph which shows how the relative weight (relative to total contract workers in all sectors) the number of employed in this activity was more than two to six points (reaching about 18% of all employed in the province ) the weight of the sector at national level (which was never assumed 14%), at present, the relative weight of the persons employed in the construction sector in the total of employed equaled down in Spain , Castellón, assuming now about 10% of employees. By contrast, the number of unemployed workers has risen from about 8% of total unemployment (both in Spain, Castellón, albeit with ups and downs in this case) to exceed 16% of relative weight, now accounting for between 12% and 14% of the total unemployed. Do not forget the contribution of this sector to GDP has been around 10% since 2005 (closer to 11% in 2006), but today is slightly lower (9.44% in the first quarter 2010).
In summary, the high rate of temporary employment in the construction sector has set the companies' labor costs through massive layoffs of workers (there is a temporary contract 58.27% less in the sector, having gone to swell the unemployment lists the 97.40% of workers with this type of contract, without forgetting that there is an indefinite contract 29.85% less), despite the low relative weight in the overall sector of the economy (10% of GDP and 12% of workers) The sector's contribution to the national increase in unemployment was 20% and the destruction of temporary jobs 37%, while in Castellón direct contribution to the increase in unemployment was 33% (the hint would be much greater, since the industrial sector, with ceramic head has been severely affected by the crisis in the construction). The long claimed (by employers' associations) labor market flexibility in construction sector is, therefore, very high, however, that flexibility in costs not reflected in a similar flexibility when addressing alterations in revenues, showing a little too stiff in line with market cost competitive (at least in the work).
The construction sector did not need, therefore, touches competitive in terms of employment structure (in any case, he needed was one more job stability, as evidenced by the high accident rate in the sector), on the contrary, that would have necessitated the construction itself would have been a company policy less speculative, less opportunistic and less rigid. The virulent correcting these deficiencies in corporate policies have had to come, unfortunately, as many bankruptcy proceedings, with the consequent impact, again, in the workplace.
We will see in the next installment of this series the origins of the collapse of the sector, the main reason not attributable to the excess supply (which also may have contributed to the crisis in the sector, though not in the key terms that appear to have been established between public opinion).
Methodological Note: The unemployment figures I have used include those seeking their first job (323,900 in Spain and 3,300 in Castellón in the last quarter), so that unemployment rates are slightly higher (between 1% and 1.5%) to officially recognized in the Labour Force Survey, which is the source from which you have data taken.
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