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What does the slowdown in productivity growth mean in Spain?
The slowdown indicates that the efficiency of generating wealth with available resources is increasing more slowly; In 2025 it grew only 0.8% year-on-year.
This signals greater dependence on employment and investment for growth, while improvements in productive efficiency lose pace.
Announcements
Structural and demographic factors, such as lower immigration, limit the creation of productive employment and the potential for sustainable growth.
The slowdown indicates that the efficiency of generating wealth with available resources (labor and capital) is growing at a slower pace; In 2025, total factor productivity grew only 0.8% year-on-year, much less than before, signaling greater dependence on employment and investment than on improvements in efficiency.
In 2025, total factor productivity registers modest growth, revealing that GDP growth is supported more by employment and investment than by greater efficiency.
This slowdown represents a structural challenge because it limits the capacity for sustained economic growth and improved wages and well-being, in a context where factors such as lower immigration and homelessness restrict the creation of productive employment.
Announcements
The scenario of lower migratory flow and difficulty in housing impacts the labor supply, hindering the growth of productive jobs and, therefore, productivity.
Some sectors such as primary and commerce maintain productive increases, but energy, construction and communications show falls, which reflects an unequal pattern in the Spanish economy.
This unequal sectoral behavior shows how some segments advance in productivity, while others face setbacks that slow down total growth.
Why is productivity still critical despite slow growth?
Productivity is essential so that Spain can grow without continually increasing resources, which ensures sustainable economic development.
It is a determining factor to improve the country's competitiveness in international markets and optimize the use of capital and labor.
Without increases in productivity, it is difficult to raise real wages and the well-being of the population in the long term.
Productivity is key to sustainable and competitive growth, as it allows GDP to increase without indefinitely increasing resources, thus compensating for structural weaknesses of the Spanish economy.
It allows economic growth not to depend solely on increasing employment or investment, avoiding inflationary pressures and resource limitations.
By improving productive efficiency, more value can be produced with less input, essential for economic sustainability in Spain.
It is complemented by employment and investment to sustain robust economic growth.
Employment drives immediate growth by increasing production through available labor.
Investment creates the physical and technological capacity so that the economy can produce more in the future along with improvements in productivity.
Employment drives short-term growth; Investment creates productive capacity and productivity raises long-term growth potential.
Although productivity grows slowly, without it it will not be possible to maintain economic development and improve well-being in the medium and long term in Spain.
Without advances in productivity, growth becomes unsustainable and living standards stagnate or decline.
Therefore, it is essential to promote measures that increase efficiency to ensure the future prosperity of the country.
How does productivity complement job creation and investment?
In 2025, total factor productivity (TFP) contributes to GDP growth along with job creation and investment, forming a balanced team.
Employment drives immediate growth, covering domestic demand and reducing the unemployment rate to 10.5%, while investment strengthens productive capacity.
Productivity provides improvements in efficiency and use of capital, supporting the sustainability of economic growth in the medium and long term in Spain.
In 2025, GDP growth was supported by 44% in employment, 26% in investment and 29% in total factor productivity (TFP), showing the combined importance of all three.
These figures reflect how Spain bases its growth on balanced collaboration between employment, investment and increases in productivity.
The significant contribution of productivity demonstrates that, although employment is key, efficiency also supports economic development.
Public investment, supported by European funds, and the partial recovery of private investment strengthen productive capacity, necessary to improve productivity in the medium and long term.
European funds channeled towards public investment modernize infrastructure and technology, boosting future productivity gains.
At the same time, private investment is growing cautiously, accompanying structural reforms aimed at innovating and digitizing productive sectors.
The current employment pattern favors sectors with greater productive potential, which helps prevent job creation from being a drag on total productivity.
Employment is concentrated in sectors such as professional and technical services, which provide more added value and promote work productivity.
Thus, job creation not only increases production but also contributes to improving the efficiency and competitiveness of the economic as a whole.
Which sectors are most affected and which have the greatest impact?
In 2025, the sectors with the greatest slowdown in productivity include the textile industry, paper industry and some manufacturing branches, which face structural challenges.
Construction shows a slowdown in visas and tenders, slowing its growth after a previous boost and affecting sectoral productivity.
Tourism and related services moderate their growth, adjusting to more normal levels after the special recovery of previous years.
The sectors most affected by the slowdown are energy (-2.5%), construction (-1.1%), information and communications (-3.7%) and financial activities (-2.6%), with significant declines in productivity.
These areas suffer drops in their productive efficiency, influenced by external and structural challenges typical of the current economic context.
In particular, information and communications present a marked reduction, impacting the country's technological dynamism.
Sectors with positive impact include the primary sector (+3.5%), commerce, transportation and hospitality (+3-4%), and professional and technical activities (+2.6%), reflecting uneven growth between sectors.
These sectors continue to show resilience and moderate progress, driven by domestic demand and improvements in labor efficiency.
The strength in professional and technical services stands out for its growing contribution to productivity and generation of qualified employment.
What policies does the OECD recommend to maintain productivity?
The OECD suggests implementing structural reforms that boost investment, strengthen employment and reduce the productivity gap between SMEs.
Promoting digitalization, improving access to financing and reducing administrative burdens are key to increasing productive efficiency.
It also recommends increasing the employment rate, mobilizing untapped labor resources and guaranteeing fiscal sustainability in the medium term.
