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Spain - Comunidad de Madrid

Short overview of the labour market


Geographically the Autonomous Community of Madrid is located in the centre of the Iberian Peninsula. Its borders roughly form an equilateral triangle, the base of which borders on the province of Toledo to the south; its northern apex is at the Somosierra mountain pass. To the north and west it borders on the provinces of Segovia and Ávila and to the east on Guadalajara and Cuenca. Madrid is a single-province Community and therefore has no provincial government. Its capital city is also the capital of Spain. It has an area of 8 027.69 square kilometres and is home to 6 576 009 inhabitants according to provisional data from municipal registers at 1 January 2018. The population is unevenly distributed throughout the territory as it is concentrated in large cities such as the capital and its ten municipalities with over 100 000 inhabitants, while some rural villages have fewer than 50 inhabitants. Based on the provisional data, the population density as of 1 January 2018 is 819 people. It is the third most populated autonomous community in Spain after Andalusia and Catalonia. For the third consecutive year the population has increased in the Community of Madrid, growing by 1.06 % in 2018 compared to 2017. This increase is above the national average which stands at 0.27 %. Madrid boasts a cosmopolitan population, as 12.55 % of its inhabitants are foreigners. It ranks second in this regard after Catalonia. The increase in population in Madrid is partly due to the rise in the number of foreign residents, which has grown by 3.74 %, compared to the 0.68 % increase in the number of Spanish nationals. The average age of Madrid’s population is 42 (34 in the case of foreigners and 43 for Spaniards). The immigrant population lowers the average age of Madrid’s population. 17.55 % of Madrid’s residents are over the age of 65, while the national average is 19.07 %. Those under 16 account for 16.48 %. The bulk of the population is between the ages of 16 and 64. Women account for 52.14 % of the population.

Madrid’s economy is one of the largest in Spain. This is mainly because the city of Madrid is the nation’s capital. According to Spain’s preliminary regional accounting estimates, Madrid's GDP grew by 3.4 % in terms of volume in 2017 with respect to 2016. This increase was higher than expected and outpaced the national average (3.1 %). This trend is expected to continue in 2018 with growth of 3.3 %, according to the forecast made in May 2018 by FUNCAS. At EUR 33 809, per-capita GDP in the Community of Madrid was the highest in Spain in 2017. In relative terms, the Community of Madrid’s per capita GDP was 35.2 % higher than the national average. The economy is led by the services sector, followed at a considerable distance by industry and construction.

According to DIRCE, in January 2018 a total of 16 % of Spain’s companies were located in Madrid, making it the Community with the second highest number of companies. The number of companies in Madrid has grown by 2.43 % since January 2017. The services sector accounts for 84 % of regional companies, followed by construction and industry at a distant second and third. The following sectors account for over 4 % of the province’s business activity: wholesale and retail trade, legal and accounting activities, construction of buildings, human health activities, food and beverage services, office administrative, office support and other business support activities, land transport and transport via pipelines, specialised construction activities, architectural and engineering activities, education. We would also highlight the following activities, which have greater relative weight in the province than in the whole of Spain: other professional, scientific and technical activities, advertising and marketing, financial, insurance and related administrative support activities, computer programming, consultancy and related activities, creative arts and entertainment activities and associative activities.

Madrid's labour market figures were positive for Q3 2018. According to LFS data: the work force in Madrid grew by 1.10 % year-on-year with an activity rate of 62.53 %, one of the highest in Spain. The occupied population increased by 1.67 % with an employment rate of 55.11 %. Unemployment fell by 2.97 % to 11.89 %. The breakdown of the occupied population by economic sector confirms the predominance of the services sector, accounting for 84.80 % of Madrid’s occupied population, followed by industry (8.90 %) and construction (6.00 %). While services account for the bulk of the occupied population, it is also the sector with the greatest number of unemployed persons.

This same positive trend applies to the number of workers paying social security contributions, which rose by 4.13 % compared to September 2017. A by-sector breakdown of contributors to the social security system again shows that services tops the list with 86.87 %, followed by industry with 6.88 % and construction with 6.08 %.

According to information from Madrid’s Public State Employment Service's Occupational Monitoring Centre, the number of unemployed persons registered in Madrid fell by 8.19 % in September 2018 with respect to the same month last year. Employment was down across the board, i.e. for men and women, all ages, all sectors, foreigners and nationals. The number of contracts registered between November 2017 and September 2018 increased by 7.70 % with respect to the same period last year. 15.64 % are unemployed foreigners and 18,75 % of these contracts were awarded to this group. The year-on-year variation was favourable for both nationals and foreigners, in all age brackets and for both men and women. The exception is agriculture, which is the only sector that declined (by 8.71 %). In contrast, the services sector grew by 12.64 %.


Text last edited on: 04/2019

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