There has been a slight improvement in Spain's industrial sector in recent months. Industrial production and capital goods investment increased in the last quarter of 2014. The Purchasing Managers Index remains above 50, indicating continued growth. The share of total employment in industry rose in 2014, and new members of the social security system in manufacturing and construction increased in January-February 2015. At the same time, the shadow economy in Spain has declined from 22.2% to 18.5% of GDP since 2003. Alternative sources of financing for Spanish companies like stock markets are less developed than in other countries.

1. Reindustrialization in Spain
There has been a slight improvement in the
industrial sector in Spain:
• Industrial production in January
increased 0.4% year-on-year (adjusted for
seasonal effects and calendar), mainly
thanks to the energy sector (+3.9%) and
capital goods production (+1.1%) (Index
of Industrial Production, INE).
• Investment in capital goods increased
10.3% year-on-year in the 4Q of 2014,
reflecting a rise in confidence in the
Spanish economy by Spanish and foreign
businessmen.
• The Purchasing Managers Index (PMI)
dropped to 54.2 (54.7 for January), but
continues to be above 50, thus reflecting
growth of the industrial sector. There has
been an increase in new orders, the largest
since the crisis began.
• In 2014 industry recovered part of its
share of the labour market, increasing
from 13.6% of the total employment in
2013 to 13.9% (Labour Force Survey,
INE).
• In addition, of the 96,909 new members
of the Social Security system between
January and February, 15,097 of them
were in manufacturing. It was this
sector –together with construction
(+26,068) and education (+16,203)– that
increased the most. In this same period,
half of the reduction of the number of
unemployed people was in industry
(-6,535).
• In January the prices of industrial
exports dropped a year-on-year average
of 0.50% (INE), which helps make the
Spanish economy more competitive.
Shadow economy
A recent survey about shadow economy in the
European Union1
reveals a decline in its
average effect on GDP (without taking into
account illegal activities) from 22.6% in 2003
to 18.6% in 2014. In the case of Spain, it has
been reduced from 22.2% to 18.5%.
In 2014, the countries with the smallest
percentage of shadow economy on GDP
(below 10%) were Switzerland, (6.9%),
Austria (7.8%), Luxembourg (8.1%), the
Netherlands (9.2%) and Great Britain (9.6%).
On the other extreme are economies like
Bulgaria (31%), Romania (28,1%) and Croatia
(28%).
The case of the Eurozone…
1
Friedrich Schneider, Konrad Raczkowski, Bodgan Mróz
(2015), “Shadow economy and tax evasion in the EU”, Journal of
Money Laundering Control, Vol.18 Iss 1 pp. 34-51.
According to this report, the factors that
most favor the size and presence of this
shadow economy are:
• Unemployment and self-employment.
• Tax morale.
• The growth of GDP.
27.1
27.1
25.7
24.7
24
23.5
23.3
20.8
18.7
18.5
16.1
14.6
13.3
12.9
11.8
10.8
9.2
8.1
7.8
0 10 20 30
Lithuania
Estonia
Cyprus
Latvia
Malta
Slovenia
Greece
Italy
Portugal
Spain
Belgium
Slovakia
Germany
Finland
Ireland
France
Netherlands
Luxembourg
Austria
Shadow economy Eurozone, 2014
% GDP
Source: Emerald Insight, 2015
Así está…March 2015
The company
1
www.circulodeempresarios.org

2. Commercial companies (INE)
In January 8,229 commercial companies were
created (-8.2% vs. January 2014), mainly in
the commerce (22.8%) and construction
sectors (15.2%).
The total capital subscribed increased 10.3%
(to 586 million euros) and the average capital
rose 20.2% (71,291 euros).
The number of companies that were
dissolved rose to 2,882, some 12.3% less than
in January 2014: 22.5% of them were in the
commercial sector and 19% in construction.
Of these firms, 78.8% were dissolved
voluntarily and 7.6% were lost through
mergers.
By Autonomous Regions…
Entrepreneur permanent contract
The last Randstad report regarding the
entrepreneur permanent support contract
reveals a year-on-year average increase until
February 2015 of 17% (98,755) (SEPE, Public
Civil Servants Service), reaching more than
272,000 in absolute terms since its creation in
2012.
The profile of the workers:
• 57% are men.
• 38% are aged between 30 and 45; 37% are
less than 30 years old, and 25% are older
than 45 years.
Ranked by Autonomous Regions, more
than 50% were signed in Madrid (28.1%)
and Catalonia (22.01%), followed by
Valencia (7.1%), the Canary Islands (6.5%)
and Andalusia (5.8%).
Alternative sources of financing
In Spain, variable-yield security –an
alternative to bank financing– is less well
developed than in other countries, in both
stock-market capitalization and in the number
of participating companies (The money in 2033:
How we can finance and how wecan save, PWC 2015).
In general, the big Spanish companies are well
represented and have a bigger average
capitalization than those in the rest of Europe;
the SMEs are the firms that use this type of
financing the least.
In general, these small firms have an
insufficient level of international activity,
are not very transparent, and are ignorant
of the stock market processes, which
prevents them from being traded publicly.
-1000 -500 0 500 1000 1500 2000
Madrid
Catalonia
Andalusia
Valencia
Galicia
Canary Islands
Balearic Isands
Murcia
Castilla Leon
Castilla La Mancha
Basque Country
Aragon
Asturias
Extremadura
Cantabria
Navarra
La Rioja
Commercial companies created and dissolved,
January 2015 Dissolved Created
Source: INE
76,478
59,942
19,404
17,758
15,650
14,435
12,783
10,778
9,234
6,764
6,478
5,560
5,361
3,441
3,100
2,835
1,575
0,000 20,000 40,000 60,000 80,000
Madrid
Catalonia
Valencia
Canary Islands
Andalusia
Galicia
Castilla Leon
Basque Country
Aragon
Castilla La Mancha
Balearic Islands
Murcia
Asturias
Extremadura
Cantabria
Navarra
La Rioja
Entrepreneurpermanent contract
2012-January 2015
Total: 272,156
Source: Randstad
143
153
272
363
720
755
1.052
2.179
2.371
2.637
3.419
Mexican
Exchange
BMESpanish
exchange
SIXSwiss
Exchange
BM&FBOVESPA
DeutscheBörse
NASDAQNordic
Exchange
Euronext
LondonSE*
NYSEEuronext
(US)
NASDAQOMX
JapanExchange
Group-Tokyo
Companies in international markets
Source: PWC
Así está… The company a publication of the Círculo de Empresarios produced by its Department of the Economy, contains information
and opinion from reliable sources. However the Círculo de Empresarios does not guarantee its accuracy and does not take responsibility
for any errors or omissions. This document is merely informative. As a result, the Círculo de Empresarios is not responsible for any uses
that may be made of the publication. The opinions and estimates of the Department can be modified without any warning.
2
www.circulodeempresarios.org