According to figures released this week by Spain’s national statistics institute (Instituto Nacional de Estadística – INE) the number of companies operating in Spain fell for a fourth straight year in 2011 to a five-year low.
30.8% of companies declared bankrupt carried out their main activity in construction and property development, 18.3% in industry and energy, and 17.4% in various other trades. Up until 2007 Spain experienced a massive building boom, with thousands of homes built for the domestic and international markets. Spain’s economy was firmly strapped to the building bubble; the thorn that popped it over the blue skies of its Mediterranean Costas left thousands of new properties vacant and was the beginning of Spain’s financial turmoil.
The autonomous communities of Catalonia, Valencia, Madrid, and Andalusia accounted for 60.5% of the total debtors processed during the second quarter of 2012. La Rioja was the autonomous community with the lowest number of debtors.
Of the 2,272 debtors processed in the second quarter, 2,026 were companies (individuals with a business activity and corporations), and 33.7% of the total number of companies declared bankrupt were small businesses with one to five employees.
Not surprisingly, Spain’s unemployment figure is at an all time high of 24.6%, almost 1 in 4 out of work. In Andalusia, where domestic tourism has been badly hit, the ratio is now 1 in 3.