Business creation
The incorporation of companies in Spain between January and November reached 88,790 companies, representing an increase of 0.77% year-over-year.
By Autonomous Community, Castile-La Mancha and Madrid exhibited marked progress with 8% and 7.4%, respectively. In contrast, sharp drops were recorded in Asturias (-9.7%) and Catalonia (-6.7%).
Manufacturing PMI
In November, Spain’s manufacturing PMI (a leading indicator for GDP growth or decline) climbed to 52.6 owing to the recovery in production and new orders, despite the deterioration in business confidence in the face of lower demand expectations.
The Euro area PMI came in at 51.8 points, a record low since August 2016, driven by the contraction of Germany’s GDP in Q3 2018 and the “yellow vests” revolt in France.
Corporation tax
According to the Spanish Tax Agency, the applicable effective tax rate on a tax base that already includes taxation in third countries and prior year tax losses stood at 21.3% in 2016 (the latest data available), in a context where 68.1% of reporting companies obtained a tax base ≤ 0. By sectors, insurance companies and credit institutions are the ones with the highest effective rates, with 23.6% and 23%, respectively.
Likewise, medium-sized (50-249 employees) and large (250+ employees) companies, which only represent 1.2% of the total number of respondents, account for 51.3% of the total income declared in 2016.
Vehicle registration
In November, passenger car registrations in Spain and the EU decreased by 12.6% and 8% year-on-year, respectively, for the third consecutive month. This unfolds in part due to the economic and political uncertainty in Italy and the United Kingdom, and the impact of a slowdown of the Chinese market in the German industry.
Real estate
Spain
In Q3 2018, the average price of m2 of housing in Spain reached € 1,590, undergoing an increase of 3.2% year-on-year and an estimate of 3.5% for the whole year. This expansive phase of the real estate sector is based on the increase in disposable income of households, the increase in employment and low interest rates. On the supply side, from January to September, the number of completed openmarket housing increased by 22.3% to 44,103.
Moreover, the sale of housing in this period reached its peak since 2008, accumulating 428,267 transactions (+10.5%). If this trend
continues, it is expected that the number of mortgages will increase by 10.5% over the whole year.
Great Britain
Since November 2016, housing prices in London have risen less than those throughout the rest of the Great Britain. Specifically, in July 2018*, they fell in by 0.7% year-on-year while in the rest of the region they increased by 3.5%.
This divergent development is caused by the uncertainty associated with Brexit, the fall in the sale of housing in London (-18.5% in March) and the rise in the LIBOR (from 0.8% in January to the current 1.16%).
ECB
On 31 December 2018, the ECB will end its ond purchase programme, which began in 2015 and has reached €2.6bn, in a context in which inflation is below 2%.
In turn, the ECB foresees a first rate hike starting in the summer of 2019 as part of its strategy to normalise monetary policy.
OPEC
Despite OPEC’s latest decision to cut output by 1.2 mbd, the price of crude oil has been at yearly lows (February WTI futures contract at $46) due to fears of a global slowdown in the economy and an increased oil production in the US.
