Spanish Housing Sector to Lose 900,000 Jobs

The collapse of Spain's house building industry will mean up to 900,000 construction workers lose their jobs by the end of 2009, an industry head said on Tuesday, reinforcing expectations of a bitter Spanish recession.

Spain's construction sector, which until last year employed over 1 in 10 workers or 2.6 million people, has been hit by chronic overbuilding and the global credit crunch.

"We predict that the housing industry will have shed almost half a million workers in 2008 and will lose between 300,000 to 400,000 more workers next year," the chairman of the Promoters Association of Madrid, Jose Manuel Galindo, told a real estate conference. Construction accounted for around 18 percent of Spain's economic growth in 2007, the second highest level in the European Union after Ireland. Analysts say it could take at least 4 years to sell a surplus of over 1 million new homes standing empty in Spain.

As the housing sector stalls, economic growth is falling faster in Spain than any other large European economy, with problems spreading into service industries.

Spanish gross domestic product fell for the first time in 15 years during the third quarter and Bank of Spain expects the slide to go on in 2009.

"All the indicators suggest that the contraction will continue, and even intensify, in the fourth quarter," the bank's head of research, Jose Luis Malo de Molina, said at the conference.

Spain's unemployment rate is the highest in the European Union and Spanish registered jobless rose to a 12-year high of near 3 million in November.

Since September, over 40,000 workers have been laid off each week in Spain, dwarfing the rate of losses elsewhere in Europe. The Spanish government last month unveiled an 11 billion euros ($14.15 billion) economic stimulus plan to create 300,000 new jobs in 2009.

Story from The Guardian

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