Spain's already lengthy jobless queues grew longer in February as the key construction and services sectors struggled to crawl their way out of recession, with the economy unlikely to start creating jobs again until 2011.
The number of people registered as jobless in Spain rose by 2 per cent compared to January, sending unemployment up to 4.13 million, Labour Ministry figures showed today.
Since February last year, the number of jobless has risen by almost 20 per cent.
Over half of the jobs lost in February came from the services sector, followed by construction with just over 10 per cent.
Sinking domestic demand following the credit crunch has led to massive job losses as Spaniards steer clear of shops, restaurants and bars, while a burst housing bubble has hit the construction sector.
February's jobless rise was significantly less than the same month last year, when the economic cris is was at its worst, the government said.
"The labour market adjustment continues, though at a much lower rate than last year, when in annual terms unemployment rose 50.3 per cent," said the head of the Labour Ministry's employment department Maravillas Rojo.
While the ongoing economic crisis continues to add to the nation's unemployment lines, seasonal effects also played a significant part, an economist at Spanish savings banks consultancy FUNCAS said.
"These figures were much worse than we'd expected ... but illustrate a seasonal effect in Spain that leads to higher job losses in the first months of the year than seen in the spring and summer time," said economist Angel Laborda.
However, Spain's battered economy - which remained in recession in the fourth quarter - was unlikely to be creating jobs any time soon, he said.
"We expect unemployment to hit a high in the first quarter, then to level out as job destruction is compensated by a shrinking active population. We don't expect to see net job creation until some time next year," Mr Laborda said.
Spain's unemployment rate, reported on a quarterly basis by the National Statistics Institute, rose to 18.3 per cent in the last three months of 2009 and will rise to 19 per cent this year, according to government forecasts.
Yesterday, the government presented plans to create 350,000 jobs in the beleaguered construction industry by cutting value-added tax on home improvement work.
The government has said construction would continue to play a key part in Spain's economy though concedes the model must move away from the rampant speculative building that helped fuel the decade-long boom that preceded the slump.
Reuters