Basque Economy Sees Positive Recovery Driven by Services and Construction
The Basque economy is recovering positively, driven by growth in services and construction, despite absenteeism challenges.
- • Basque economy revises growth forecasts to 2.2% for 2025
- • Services sector expected to grow by 2.7% in 2025
- • Unemployment decreased by 0.95%, with notable drops in service jobs
- • High absenteeism rates remain a challenge in both sectors.
Key details
The Basque economy is showing significant signs of recovery, largely attributed to growth in the services and construction sectors. Mikel Torres, the Basque Minister of Economy, Labor, and Employment, announced an upward revision of economic forecasts, projecting a growth of 2.2% for 2025 and 1.9% for the following year, compared to previous estimates. This improvement is driven predominantly by the services sector, which is anticipated to grow by 2.7% in 2025, alongside a forecasted 2.5% growth in construction.
Recent employment data highlights a 0.95% decrease in unemployment, with particularly notable improvements in the services sector where unemployment dropped by 3.08%, resulting in a total of 75,394 unemployed individuals in this sector. The construction sector has also seen positive changes, with a marginal decline in unemployment by 76 individuals.
The hospitality industry, which struggled in previous months, has rebounded impressively, adding nearly 5,000 new contracts since August, marking a substantial recovery. The permanent employment rate in this sector stands at 37%, significantly exceeding the national average.
Despite this positive outlook, both the services and construction sectors face challenges related to absenteeism. The latest Randstad report notes a leading absenteeism rate of 9.3% in the services sector and 6% in construction. Torres emphasized the importance of addressing absenteeism to sustain the recovery.
In addition to these developments, the Basque region is exploring innovations in the construction sector, with a focus on circular economy strategies that aim to reduce waste and enhance sustainability. With the Spanish construction industry generating substantial waste, there's a growing consensus on the need for a concerted push towards more sustainable practices, which could also create new economic opportunities.
As the economy continues to recover, stakeholders in the Basque region are hopeful that these sectors can maintain their upward trajectory while addressing the pressing issues of absenteeism and sustainability to ensure long-term growth and stability.