Press release 08/03/2019
QUARTERLY ACCOUNTS. IV/2018
The GDP of the Basque Country was up 2.8% in 2018
The fourth quarter closed with year-on-year growth of 2.4% and quarter-on-quarter growth of 0.5%
The GDP of the Basque Country posted an increase of 2.4% in the fourth quarter of 2018, compared to the same quarter of the previous year, according to estimates made by Eustat. Compared to the third quarter of 2018, the estimated quarter-on-quarter variation rate was 0.5%, which coincides with that estimated in the previous quarter. For 2018 as a whole, the increase in GDP compared to 2017 was estimated at 2.8%.
The growth estimates for the fourth quarter coincided with those obtained for the Advance Quarterly Economic Accounts for 30 January 2018.
From the point of view of supply, the year-on-year growth in GDP during the fourth quarter of 2018 resulted from the positive performance of all sectors, except Industry which posted a regression in both year-on-year and quarter-on-quarter terms
The Industry sector registered a negative year-on-year variation rate of 0.2% compared to the same quarter of the previous year. With respect to the third quarter of 2018, the decrease was estimated at 0.9%. Manufacturing Industry was down in both year-on-year and quarter-on-quarter terms, performing in a similar way to Industry as a whole, with an estimated year-on-year rate of -0.1% and an estimated quarter-on-quarter rate of -0.9%. The Industry sector experienced a continued deceleration over the course of 2018, until starting to decrease in this last quarter.
On the other hand, the Construction sector registered a very positive performance throughout 2018, following an upward trend. In the fourth quarter, the estimated year-on-year variation rate was 5.6%, which indicates a growth rate of 1.5% compared to the third quarter. Over the course of 2018 the Construction sector posted an acceleration, with increasing growth rates.
Global activity within the Services sector in the last quarter of the year continued the growth trend observed in previous quarters, with year-on-year and quarter-on-quarter growth rates of 2.9% and 0.9%, respectively.
The performance of the Services sector varied by branch. The Trade, Hotel Management & Catering and Transport branch saw a growth of 3.0% compared to the same quarter of the previous year, and a growth of 1.1% compared to the previous quarter.
In the Public Administration, Education, Health and Social Services branch, although it saw sustained growth throughout the year, growth was slightly more modest in the second quarter, with a year-on-year growth rate of 2.2% in the fourth quarter, and a quarter-on-quarter growth rate of 1.0%.
Finally, the activities included in the Other Services sector; which includes property, professional, scientific and technical, and financial and insurance activities; as a whole continued to see year-on-year growth above 3%. The fourth quarter posted a year-on-year variation of 3.1% and a quarter-on-quarter variation of 0.6%.
The aggregated performance by sector in the fourth quarter of 2018 gave rise to an upturn in Value Added both in year-on-year terms (up 2.4%) and in quarter-on-quarter terms (with an increase of 0.6%), although there was a slight deceleration throughout the year.
From the point of view of Demand, the performance of Internal Demand was more positive than that of the external sector in this fourth quarter, with year-on-year growth higher than GDP growth. Its two components (Final Consumption Expenditure and Gross Capital Formation) both performed positively, particularly the latter.
The performance of the external sector was more moderate, with growth rates below 1%, in both exports and imports.
Final Consumption Expenditure of Households and Non-profit Institutions Servicing Households (ISFLSH) (Private Consumption) saw an acceleration in its growth in the last quarter of 2018. The year-on-year variation rate stood at 2.6%, which was three tenths higher than that observed in the previous quarter. The quarter-on-quarter rate was also higher than the previous quarter, reaching 0.9% this quarter (6 tenths more than the previous quarter). Performance was positive in all quarters of the year, although with slightly lower levels than in previous years.
Public Consumption (Final Consumption Expenditure of Public Administrations) posted a growth of 0.8% in year-on-year terms, which contributed a 1.4% increase compared to the previous quarter. There was a deceleration in Public Consumption over the course of 2018, but positive rates were registered in the four quarters.
The overall performance of the Final Consumption Expenditure of Public Administrations combined with the Final Consumption Expenditure of Households led to an upturn of 2.2% in Final Consumption Expenditure. With regards to the previous quarter there was an upturn of 1%.
Gross Capital Formation (Investment) registered solid growth for all quarters of 2018, with the fourth quarter reaching a year-on-year rate of 4.1%. The quarter-on-quarter rate was also positive (1.6%). This overall performance of investment was based on two trends of different direction and intensity.
The performance of Capital Goods showed a positive trend, although it became more moderate over the course of the year, finishing the year with a year-on-year growth rate of 2.1%, although compared to the previous quarter growth was 1.1%.
The Rest of Gross Capital Formation, which is more closely linked to the performance of construction, posted an acceleration in the year-on-year growth rates throughout the year. In the last quarter year-on-year growth reached 5.2%, and quarter-on-quarter growth stood at 1.9%.
Internal Demand, composed of Final Consumption Expenditure and Gross Capital Formation, posted a positive variation in year-on-year terms of 2.6%. These increases were slightly higher than the estimates for GDP, and therefore the contribution of the External Sector was slightly negative in this last quarter. Exports were up 0.3% compared to the fourth quarter of the previous year, whilst Imports increased slightly more, by 0.6%.
As regards the level of employment (measured in Full-Time Equivalent Jobs), of particular note is the 2.0% growth in the year-on-year rate, a rate that has remained relatively stable in recent years. This year-on-year rate means a 0.5% growth with respect to the third quarter of 2018.
The year-on-year performance of employment levels was positive in all branches of activity. The positive performance of the Construction sector stands out, given that the growth rate in this last quarter was 4.1% higher than in the same quarter of 2017. The Services sector continued to create an important number of jobs, 1.9% more than the number registered for the last quarter of 2017. The industrial sector also posted a positive year-on-year growth rate (1.5%), although it was down compared to the previous quarter by 0.3%. Finally, the Primary sector saw a different pattern, being the only one with a greater employment in this last quarter than in the same quarter of the previous year, with a rate of 3.1%.
As for the performance of GDP by Province, Bizkaia posted a year-on-year rate of 2.6%, whilst Gipuzkoa and Álava registered more moderate year-on-year growths (2.3% and 2.2%, respectively). However, compared to the third quarter of the year, Gipuzkoa had the highest growth with a quarter-on-quarter rate of 0.6%, compared to 0.4% and 0.3% in Bizkaia and Álava, respectively.
BALANCE FOR 2018
The GDP of the Basque Country grew by 2.8% over the course of 2018, one tenth less than in 2017. This is the fourth consecutive year with growth rates of almost 3%. The first provisional estimate of GDP for 2018 was obtained as an aggregation of the GDP estimates for each of the four quarters.
In 2018, In terms of supply, all the main sectors of the economy registered an upward trend. The Construction sector stands out, with an annual growth of 4.3%. It was followed by the Services sector (2.9%), the Primary sector (2.3%), and finally Industry (2.1%). Within Services, the sector with the smallest growth was Public Administration, Education, Health and Social Services (2.4%). The Construction and Services sectors both saw an acceleration in their growth in 2018, whilst Industry and above all the Primary sector suffered a deceleration.
The analysis in terms of Demand showed a growth in Internal Demand of 2.8% which, together with a year-on-year growth of 2.8% in GDP, meant a null contribution from the foreign balance for 2018. That is, the overall positive performance of exports and imports was compensated for throughout the year.
The growth in Internal Demand in 2018 was mainly due to the growth in Gross Capital Formation (up 4.1%, with an increase of 4% in the investment in capital goods and an increase of 4.2% in the others). Final Consumption Expenditure grew at a slower rate of 2.4%, especially owing to the moderate growth in Public Consumption (1.7%), given that Private Consumption was up 2.6% compared to 2017.
The performance of employment, measured in Full Time Equivalent Jobs was positive, with an estimated growth of 2.1% for 2018, which meant a net increase of more than 19,000 jobs. Annual employment was obtained as an average of the estimated number of employees in each of the quarters and constitutes the first provisional estimate of this figure.
Within employment, the Construction sector performed best, with an increase of 3.6% compared with the average for 2017 (higher than the 2.0% estimated the previous year). Within the Services sector it stood at 2.1% (the same growth as that registered in 2017), whilst the creation of jobs slowed down in both the industrial sector (up 1.7%), and in the primary sector, which saw a slight growth of 0.2%.
The trend in GDP by Province for 2018 was positive in the three Provinces: Both Álava and Gipuzkoa grew at a rate of 2.8%, followed by Bizkaia with a rate of 2.7%.
For further information:
Eustat - Euskal Estatistika Erakundea / Basque Statistics Institute
C/ Donostia-San Sebastián, 1 01010 Vitoria-Gasteiz
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