To date, construction is the sector of the Spanish economy that has suffered the greatest losses in terms of companies and jobs due to the Covid-19 coronavirus crisis.
According to data from the Ministry of Employment and Social Security, the construction sector has been the hardest hit in terms of the Spanish labour market, with the greatest losses during the month of March. In this way, between February and March, the number of construction companies registered for Social Security purposes fell by 12.4% compared to an average fall in the wider economy of 6.5%. “In absolute terms, 16,216 companies out of a total of the 131,069 that were registered for Social Security purposes in February ceased to be registered during the month of March,” explains Antonio Ramudo, Data Scientist at Brainsre.
The same goes for employment. During the month of March alone (the lockdown and State of Emergency were introduced on Saturday 14 March), more than 147,000 construction jobs were lost. “If we talk about workers, the construction sector saw a decrease of 16.8% between February and March 2020. In absolute terms, it went from having 881,014 Social Security-affiliated workers to having 733,313 in just one month. As such, 147,701 jobs were destroyed. That represents a 16% decrease compared to the previous year ”, according to the analyst from Brainsre.
The construction sector is not the only one within the real estate market to be hit, albeit to a lesser extent, by the coronavirus crisis. Other companies linked to real estate activities, such as those dedicated to the sale and rental of real estate properties, agents, managers and administrators of real estate have also been affected; they saw a monthly drop of 2.3%. Nevertheless, that was one of the most moderate falls in the Spanish job market where the average reduction between February and March was 6.5%. In absolute terms, 836 companies and almost 3,789 workers ceased being registered for Social Security purposes last month.
Decreases in other sectors
Apart from the direct impact on the construction sector and real estate activities, other sectors linked to real estate have also been affected by the Covid-19 crisis. In this way, the hotel/hospitality industry registered an 11.6% drop in the creation of new companies during March, in other words, it lost more than 20,000 companies and almost 185,000 employees.
Transport and storage suffered a 7.7% decrease in March, with the loss of more than 5,000 companies and more than 35,000 employees. In commerce, the decrease in March was 4.9% with the loss of more than 14,000 companies and more than 86,000 employees.
SMEs and medium-sized companies, the most affected
Within the construction sector, which has gone from having more than 130,000 registered companies for Social Security purposes to having less than 115,000 in a month, the most affected companies have been small and medium-sized companies (those with fewer than 250 workers). There has been a special incidence of companies with between 3 and 250 employees, which have suffered a decrease of between 15% and 21% in their Social Security enrolments, for both companies and workers, accounting for 85% of the jobs lost in the construction sector in March.
In the real estate business, which has gone from having 35,862 registered companies for Social Security purposes to having less than 35,026 in a month, the most affected companies have also been small and medium-sized companies (those with fewer than 250 workers). There has also been a special incidence of companies with between 3 and 250 employees, which have suffered a decrease of between 4% and 10% in their Social Security enrolments, with those companies employing between 50 and 250 workers being the most severely affected.
The same has happened with employment, where companies with between 3 and 250 workers have also been those that have seen the most jobs destroyed during the first month of the coronavirus crisis in Spain, with between 4% and 7% of employees no longer registered.
Andalucía loses 26% of its business fabric
By region, the autonomous community that has seen the greatest impact due to the decline in the number of construction companies has been Andalucía, which has lost 26% of its companies in a month, and 31% of its jobs, with 5,550 fewer companies and 45,198 fewer workers in March.
Other communities severely affected by the Covid-19 crisis include Extremadura, with 22% fewer companies and 28% fewer workers; Castilla La Mancha, where the number of companies has decreased by 19% and the number of workers by 21%; Murcia, with 15% fewer companies and 17% fewer workers; and the Canary Islands, with 13% fewer companies and 17% fewer workers.
In absolute terms, Andalucía is also the region that has lost the most companies and workers in March 2020, having gone from having 20,975 registered companies for Social Security purposes in February to having 15,425 in March and from having 143,808 construction employees registered for Social Security purposes in February to having 98,610 in March.
At the provincial level, 25 provinces have seen a fall of more than 10% of the number of companies registered for Social Security purposes.
That ranking is mainly led by provinces in Andalucía such as Jaén, Córdoba, Granada, Huelva and Sevilla, all of which have been affected by a loss of more than 28% of the companies of this sector. In absolute terms, Madrid is the province that lost the most construction companies in March, 1,703 to be precise; it was followed by Malaga and Seville with 1,337 and 1,293 companies, respectively.
By number of workers, nationwide, the drop amounted to 17% in March compared to the previous month. The five most affected provinces in the sector were again all Andalucían: Cádiz (39%), Jaén (-37%), Córdoba (-35%), Huelva (-35%), Sevilla (-34%).
The least affected cities were Guipúzcoa, Lugo and León. However, in absolute terms, Madrid was the province that lost the most construction jobs in March: 18,108 to be precise; followed by Sevilla and Malaga, which lost 11,504 and 11,465 positions, respectively.