Corbacho Ends Migrant Recruitment Abroad While Industrial Output Continues To Fall

Spain's Labour Minister Celestino Corbacho announced earlier this week that Spain has decided to stop hiring immigrants in their countries of origin next year because rising unemployment employment in Spain now means such workers are no longer needed, and Spain's newly unemployed can be transferred to fill the gaps which may arise. Spain began to recruit workers in the home countries in 2004 in an attempt to reduce the tragic flow of illegal immigrants who risk their lives to cross into Spain by sea from North Africa. Some 200,000 immigrants came to Spain under the programme last year, according to Corbacho, while so far in 2008 the number has been around 86,000.

The Spanish government is also preparing a 1 billion-euro plan to try to relocate around 100,000 unemployed construction workers in environmental work, social services or caring for the elderly and disabled, according to sources at the Labor Ministry.


Spain's Industrial Output Down

Spanish industrial production contracted for a third successive month in July. Production at Spain's factories, refineries and mines, which accounts for around 15% of the Spanish economy, fell 4.4 percent from a year earlier after adjusting for the number of days worked, according to data out today from the National Statistics Institute. That followed a revised 9.2 percent drop in June, the sharpest fall since a 1993 recession.



But in the same way that June's fall was perhaps unduly strong following the truck drivers strike earlier in the month, so July's real fall may well have been a little greater than appears in the data as work from June was carried over to July. This interpretation is plausible, and would fit in nicely with the data provided by the purchasing manager surveys, which show the output contraction gathering rather more pace in July than June, before finally beginning to ease back a little in August.  In fact the August PMI reading, which  stood at 42.4 (up from 39.2 in July) was still the third lowest recorded in the ten-year survey history.



Banesto Shares Cut To sell By Deutsche Bank

Banco Espanol de Credito SA, otherwise known as Banesto, had its shares cut to "sell" from ``hold'' by Deutsche Bank today. Deutsche generally lowered price estimates for Spanish banks citing concern about slowing economic growth and rising defaults.

Carlos Berastain, a Madrid-based analyst for Deustche, cut price estimates by an average 27 percent on Spanish domestic banks and 12 percent for the country's biggest banks. He reaffirmed ``sell'' ratings on Banco Popular Espanol SA, Banco Sabadell SA, Bankinter SA Banco Pastor SA. Santander remains ``buy'' and Banco Bilbao Vizcaya Argentaria ``hold,''.