The sensitivity of wages to the cyclical situation has stepped up since mid-2012 which, in principle, suggests the labour market is functioning more in step with developments in the economy and the clearly declining trend of inflation. Indeed, in September the consumer price index posted a year-onyear rate of 0.3%, resuming a favourable difference vis-à-vis our European partners. The excessive dependence of the Spanish economy on the construction sector in the previous expansion no doubt entailed a factor of vulnerability. From the onset of the crisis in 2008, the deterioration of this sector was continuous; from then to the second quarter of this year, its real value added posted a cumulative decline of more than 40%, far higher than that recorded by the market economy as a whole, which did not exceed 10%. A major challenge facing the Spanish economy today is to have other industries, other than construction, take up the baton in terms of the creation of value added. And here, too, there are positive signs in recent quarters. The industrial sector achieved moderately positive growth in the second quarter, helped no doubt by the sound performance of exports. And the same occurred with the services sector. Despite the containment of labour costs and while bearing in mind that the data show a less adverse trend in unemployment, this is the most serious of our macroeconomic imbalances and that showing most resistance to correction.
Some analysts estimate – and at the Banco de España this appears to be a technically reasonable estimate – that, owing to the labour reforms, the economic growth threshold for job creation may have been lowered, which should impel the start of a correction in the unemployment rate with what are still moderate GDP growth rates. As regards private-sector debt, Spanish households strongly increased their debt in the expansion preceding the crisis; their debt ratio rose from less than 70% of gross disposable income in 2000 to close to 130% in 2007 and 2008. Non-financial corporations moved on a  2  BIS central bankers’ speeches  similar path, which lasted longer over time, with their debt ratio climbing from over 60% of GDP in 2000 to a peak of over 140% in 2010. Here, too, there are signs of correction. Since 2010, households’ and firms’ debt has fallen by almost 10 pp and 20 pp, respectively. Admittedly, though, such restructuring is slow as a result of weak nominal growth in household and corporate income. But the soundness of the recovery will unquestionably also depend on the progress made in normalising financing flows. Since 2009, outstanding credit extended by our banking system to Spanish non-financial corporations and households has been contracting uninterruptedly. As at September 2013 it was 5.4% lower than a year earlier, but the decline was more marked for firms than for households: a decline of somewhat more than 9% for the former, and of 4.5% for the latter.