Spain created more than 400,000 jobs in 2014, in a clear sign that the country is finally starting to emerge from its labour market crisis.

Over the last 12 months, 434,000 jobs were generated, bringing the overall unemployment rate down to 23.7 per cent, according to data released yesterday by the National Statistics Institute (INE).

It is the first such annual net job increase since 2007 for Spain. In that year, unemployment dropped to just below 8 per cent, on the back of a property-fuelled economic boom. However, the collapse of the housing and construction sectors, followed by the euro-zone crisis, saw Spain’s jobless rate soar to 27 per cent by the end of 2012.

Reforms

The conservative government of Mariano Rajoy has struggled to control the labour market crisis. Its reforms have included a controversial law making hiring and firing easier and cheaper, in an effort to make the market more flexible.

Deputy prime minister Soraya Sáenz de Santamaría said the new figures showed the reforms were paying off. “This change in trend is the beginning of a new era,” she said, adding that the 2014 data represented “a positive sign for those Spaniards who are still waiting for an opportunity, and a sign that clearly shows that the objective of creating a million jobs between 2014 and 2015 is realisable.”

Services and industry were the main sectors that benefited from the labour market upturn. However, 40,000 new jobs in construction were also seen as significant.

Despite the relatively positive data released, the quality of jobs created has been under scrutiny, and opposition groups have pointed to the reduction in salaries that Spain has seen recently.

Opposition Socialist Party leader Pedro Sánchez reacted to the figures by saying "the type of work being created was precarious and was generating poverty among workers.

The Professional Union of Autonomous Workers said many Spaniards were being forced into self-employment because of a lack of opportunities elsewhere.