Press Release 27/02/2018

QUARTERLY ACCOUNTS. IV2017

The GDP of the Basque Country registered a rise of 2.9% in 2017

The fourth quarter closed with quarter-on-quarter growth of 0.7% and year-on-year growth of 3.0%

The GDP of the Basque Country posted growth of 3.0% in the fourth quarter of 2017, compared to the same quarter of the previous year, according to Eustat data. With regards to the third quarter of 2017, the variation was 0.7%, identical to that of the previous quarter. With these data, the 2017 annual balance closed with an increase in Basque GDP of 2.9% compared to the previous year.

The growth figures for both the fourth quarter and the 2017 annual balance were the same as those obtained for the Advance Quarterly Accounts for 29 January 2018.

From the point of view of supply, the year-on-year growth in GDP during the fourth quarter of 2017 is due to the positive performance of all activity sectors, except the Primary sector. Industry and Construction grew at a higher rate compared to the previous quarter, whereas the growth rate for Services was lower than in the third quarter. However, performance varied across all services subsectors.

In this fourth quarter, the Industry sector had a year-on-year growth rate of 3.7%, which was one percentage point higher than in the third quarter. This figure for the year-on-year performance shows a growth of one point seven percentage points in quarter-on-quarter terms. The annual performance of this quarter is a result of the growth in Manufacturing Industry, which was identical to that observed in industry as a whole.

In the Construction sector the annual growth rate accelerated slightly compared to the previous quarter and was up by 3.1%. A quarter-on-quarter growth rate of 4.5% was registered.

Global activity within the Services sector recorded positive variations in both year-on-year and quarter-on-quarter terms: 2.9% and 0.3% respectively. The year-on-year growth of 2.9% in Services is the result of the positive performances of the sub-sectors, though to different extents: the Trade, Hotel Management & Catering and Transport branch grew at a rate of 3.1%, the highest of all sub-sectors. In second place was Public Administration, Education, Health and Social Services with growth of 2.9%, while the Other Services sector, which includes, amongst others, professional, finance and insurance activities, increased by 2.7%.

Regarding quarter-on-quarter variation, the Trade, Hotel Management & Catering and Transport sector posted an increase of 1.1%. This was followed by Other Services which grew at a rate of 0.5%. Finally, the Public Administration, Education, Health and Social Services sector registered a negative quarter-on-quarter growth rate of 0.9%.

The aggregated performance by sector has given rise to a 3.0% upturn in Value Added. This figure was identical to the year-on-year figures for the previous quarter. There was also a 0.9% rise in the quarter-on-quarter rate.

From the point of view of Demand, the most relevant factor in year-on-year terms is the sustained positive performance of Internal Demand, with growth of 3.1%. This has been a constant factor throughout 2017. Its two components (Final Consumption Expenditure and Gross Capital Formation) performed positively, with Gross Capital Formation registering an increase of 3.8% and Final Consumption Expenditure rising by 2.8%.

The external sector performance (above all in relation to abroad) maintained a positive dynamic, with export and import figures that were up 4.8% in both cases.

Final Consumption Expenditure of Households (Private Consumption) revalidates the positive performances recorded in each quarter of 2017, albeit with a slowdown towards the end of the year. Growth in this quarter was 2.8%, two tenths lower than the previous quarter. The quarter-on-quarter rate was 0.1%, which was also two tenths lower than the third quarter.

Public Consumption (Final Consumption Expenditure of Public Administrations) grew by 2.9% in year-on-year terms, two tenths higher than the estimated annual figure for the previous quarter, representing a quarter-on-quarter growth rate of 1.2%.

The overall performance of the Final Consumption Expenditure of Public Administrations combined with the Final Consumption Expenditure of Households led to an upturn of 2.8% in Final Consumption Expenditure. With regards to the previous quarter there was an upturn of 0.3%.

Gross Capital Formation (Investment) registered solid growth for all quarters of 2017, with the fourth quarter reaching the annual rate of 3.8%. The quarterly rate was also positive at 2.1%. This overall performance of investment was based on two trends of different intensity. The performance of capital goods showed a positive trend, although the average for 2017 was more moderate than that of 2015 and 2016. The year-on-year growth rate in this fourth quarter was 4.6%, resulting in a quarterly increase of 1.6%.

On the other hand, the rest of Gross Capital Formation, which is more closely related to the performance of the construction sector, registered a more modest rise, increasing by a year-on-year rate of 3.4%, which represents a quarter-on-quarter growth rate of 2.4%. Here, there was some improvement in relation to the average quarterly performance of 2015 and 2016.

Internal Demand, composed of Final Consumption Expenditure and Gross Capital Formation, posted a positive variation in year-on-year terms of 3.1%.

As regards the level of employment (measured in Full-Time Equivalent Jobs), there was an overall increase in the level of employment of 2.0% in year-on-year terms, a rate that has remained relatively stable throughout 2017. This year-on-year rate means a 0.6% growth with respect to the third quarter of 2017.

Employment levels performed positively in relation to the same quarter of the previous year in all sectors of activity, except the Primary Sector. The Services sector stands out for both its volume and performance, with an annual growth rate 2.2%. Industry and Construction achieved its estimated growth rate of 1.6%. There was a 3.4% drop in the year-on-year rate in the Primary sector, though its absolute figures were considerably more moderate.

In quarter-on quarter terms, there were positive performances in all branches of activity except Primary (-5.9%). The Construction sector stands out with a rise of 3.9%, along with the Services and Industry sectors, which registered increases of 0.7% and 0.1%, respectively.

Regarding the performance of GBP by Province, Álava and Gipuzkoa had the same annual and quarterly rates of 3.2% and 0.8%, respectively. In Bizkaia, performance this quarter was more moderate, with an annual growth rate of 2.8% and quarterly growth of 0.6%.

BALANCE FOR 2017

The GDP of the Basque Country economy grew by 2.9% over the course of 2017, two tenths less than in 2016. Viewed from a certain perspective, it should be noted that the three-year period 2015-2017 has maintained average growth of around 3.0%.

In 2017, in terms of supply, with the exception of the Primary Sectors, the other large activity sectors posted positive performances. Of particular note was the 3.1% rise in the Services sector. The Industry sector came a close second, registering an increase of 2.7% for the year as a whole. In turn the Construction sector posted positive variations of 2.5%.

The global performance of the Industrial Sector is the result of an increase of 2.8% in the Manufacturing Industry. All three sub-sectors within the Services sector showed a positive performance. Trade, Hotel Management & Catering and Transport was the most dynamic of the three, posting a growth rate of 3.7%. The Other Services sector was in second place with an increase of 2.8%. Finally, the Public Administration, Education, Health and Social Services sector exhibited a somewhat more moderate performance, posting an increase of 2.7%.

The analysis in terms of Demand showed a growth in Internal Demand of 3.0% which, together with a year-on-year growth of 2.9% in GDP, means a slightly negative contribution from the foreign balance for 2017 as a whole. The overall performance of imports was somewhat more dynamic than that of exports.

The positive growth in Internal Demand throughout 2017 was based on a 2.8% growth in Final Consumption Expenditure, with positive postings in both Final Consumption Expenditure of Households (3.0%) and Final Consumption Expenditure of the Public Administrations (2.4%).

It is also worth mentioning the positive growth in Gross Capital Formation (3.5%), fourth tenths higher than in 2016. In 2017 Gross Capital Formation exhibited two trends of differing intensity, as in the four quarters of the year. Capital Goods posted positive growth (4.7%), whereas the rest of Gross Capital Formation, which is more closely linked to construction, registered a more moderate performance (2.7%). However this difference in growth rates reduced as the year went on.

Variation in employment, measured in full-time equivalent jobs, was positive, with an estimated growth of 2.1% as an average of 2017. Within employment, the Services sector performed best, with an increase of 2.2%, compared with the average for 2016. The 1.7% growth in the Industrial sector is also noteworthy, closely followed by Construction (1.6%). In the Primary Sector, employment rates held at their 2016 average levels (0.1%), with no jobs shed.

The trend in GDP by Province for 2016 was positive in the three provinces: Álava was up by 3.0%, Bizkaia by 2.9% and Gipuzkoa by 2.8%.

For further information:

Eustat - Euskal Estatistika Erakundea / Instituto Vasco de Estadística C/ Donostia-San Sebastián, 1 01010 Vitoria-Gasteiz Press Service: servicioprensa@eustat.eus Tlf: 945 01 75 62