BALEARICS SUFFERS “WORRYING” RISE IN JOBLESS

PALMA/MADRID
THE Balearic government could not hide its alarm yesterday over the latest regional unemployment figures which last month rose by nearly eight percent, the sharpest increase in Spain, to hit 72'116.

Government spokesperson and Minister for Work, Joana Barcelo, was forced to recognise that the figures are “very bad” and are a clear indication as to just how delicate the Balearic employment sector is.

The Sectretary General of the Balearic UGT, General Worker' Union, Lorenzo Bravo, slammed the figures a “disaster” and said that he is “extremely worried” about the 5'320 people who lost their jobs last month and the thousands more which are going to be laid off over the coming weeks as the tourist season shuts down for winter with 25'309 (54.1 percent) more people out of work in the Balearics than a year ago.

The country as a whole is deeply concerned about the sudden surge in unemployment.
Spanish jobless claims rose by 80'367 during September to 3.7 million, as the storm of job destruction that has already decimated construction and industry lashed the country's service industry.

Four out of five jobs lost in the month were from the services industry, partly due to the end of summer contracts in the tourism industry and a reduction in the scale of a public works programme but also due to the knock-on effect of massive job losses that have already happened elsewhere in the economy. “Unemployment has already risen very intensively in construction and then it rose very intensively in industry. Now it's hitting services in a big way,” said Xavier Segura of Caixa Catalunya.

The scale of September's rise in the numbers claiming unemployment benefits took some analysts by surprise. “It's a lot higher than we had been expecting, which was for about 40'000,” said Jose Luis Martinez of Citigroup.
Spain only provides quarterly unemployment data, with the most recent figure, from the second quarter, being 17.9 percent. Segura expected this to rise close to a maximum of 20 percent some time next year. The economy is expected to begin to recover sluggishly only in the second half of 2010.

The European Union statistics office, which uses a different methodology, said on Thursday that Spain's unemployment was 18.9 percent in August compared to the average for the 27-member EU of 9.1 percent. “Jobs are still being destroyed in Spain and that will continue for the next few months,” said Jose Garcia Zarate, of 4cast in London.
The world financial crisis has claimed more jobs in Spain than elsewhere because of the country's long dependence on low- productivity construction and services jobs during the debt-fuelled boom that came to a sudden end in 2007.

This has led to particularly sharp reductions in retail sales in Spain and to forecasts of a continued rise in non-performing loans for banks. NPLs were equivalent to about 4.5 percent of total bank loans in June.