Spain loses productivity in 2026: Blame for failed investment and high costs?

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Spain faces a worrying scenario with a projected drop in labor productivity for 2026, a key factor for its economic growth.

Productive stagnation, despite record employment, generates uncertainty about the country's ability to improve its competitiveness and social well-being.

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This article analyzes the causes behind this loss of efficiency, contrasting different perspectives and proposing solutions to reverse the trend.

Fall in Productivity per Occupant according to the IEE

The Institute of Economic Studies predicts a drop in productivity per employed person in Spain of 0.3% in 2025 and 0.2% in 2026, remaining 3.6% below 2019.

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This decline indicates lower economic efficiency despite growth in employment, with productivity per hour worked increasing only 1.9% since 2019, reflecting slow progress.

The indicator reveals that each worker generates less average production, pointing out structural weaknesses in Spanish productivity in the short term.

Downgrade forecast and current level

Although the Spanish economy will grow by 2.9% in 2025 and 2.1% in 2026, productivity does not support this growth supported by record employment.

Unit labor costs have increased by 25% since 2019, limiting competitiveness and the potential for wage improvement despite employment expansion.

This gap between economic growth and productivity reflects an extensive growth model that does not improve real operational efficiency per worker.

Impact on economic growth

Falling productivity reduces GDP per capita growth and limits the ability to improve the well-being and quality of life of the population.

Furthermore, lower efficiency makes it difficult to absorb increases in energy and wage costs without putting pressure on inflation, risking prolonged stagnation.

Failure to correct this trend could compromise the sustainability of Spanish economic growth towards 2026 and beyond.

Main Causes of Low Productivity

The fall in productivity is rooted in insufficient investment and growing rigidity in the labor market, which hinder improved efficiency.

High business costs and lack of technological modernization directly affect the country's economic performance and competitiveness.

Furthermore, the Spanish productive structure shows weaknesses that limit the ability to increase average production per worker.

Lack of investment and structural weakness

Investment in productive capital has been insufficient, slowing innovation and the adoption of technologies that boost long-term productivity.

This structural weakness translates into limited growth in productivity per hour worked, despite increased employment.

The delay in modernizing key sectors reduces profitability and hinders sustained improvement in efficiency levels.

Ineffective labor market and business costs

The Spanish labor market presents rigidities that prevent efficient adjustment of labor supply and demand, affecting productivity.

High unit labor costs restrict companies' ability to compete and invest in technological improvements and training.

This combination of factors increases costs without translating into a proportional increase in production per employee.

Contrasts with Other Sources and Comparative Analysis

Different entities such as Eurostat present data that, although they agree on the general drop in productivity, show variations in the magnitude and causes.

Some experts attribute low productivity to similar structural factors, but emphasize the role of digitalization and technological innovation.

The discrepancies reflect different methodologies and approaches in the interpretation of the labor market and productive investment in Spain.

Vision of the IEE against Eurostat and experts

The IEE highlights insufficient investment and labor rigidities as central causes that slow down productive improvement in the short term.

Eurostat adds emphasis on technological lag and the limited adoption of new organizational models to explain low productivity.

Independent experts suggest that, furthermore, the lack of effective public policies and poor training negatively impact growth.

Differences in the work scenario

While the IEE highlights the rigidity of the Spanish labor market, other analyzes highlight the high temporality and precariousness that affects productivity.

International comparisons show that Spain has less investment in human capital and continuous training compared to reference countries.

These differences make up a complex work scenario where high costs do not translate into greater production per employee.

Solutions, Implications and Outlook for 2026

To reverse the drop in productivity, Spain needs a comprehensive strategy that combines technological investment and labor reforms. This would boost competitiveness and efficiency.

Strengthening human capital, especially through continuous training and digitalization, is key to improving productivity per worker in the near future.

Without these changes, the Spanish economy could face prolonged stagnation that would negatively affect social well-being and sustainable growth.

Proposals to reverse the trend

Increasing public and private investment in innovation and technology is essential to modernize productive sectors and improve operational efficiency.

Labor reforms must focus on making the market more flexible to reduce temporary employment and precariousness, facilitating an efficient adjustment of supply and demand.

Furthermore, active training and professional retraining policies would promote the adaptation of the workforce to new technological and organizational demands.