Sales, services and trade
IGN (2021): The COVID-19 pandemic in Spain. First wave: from the first cases to the end of June 2020
Monographs from the National Atlas of Spain. New content
Thematic structure > Social, economic and environmental effects > Economic indicators and productive sectors > Sales, services and trade
During the first months of the pandemic, particularly from March to May 2020, the sales, services and trade sector, which includes commerce, financial services, advanced services (high-value added and high quality specialised services whose main resource is knowledge) and personal services, registered a loss of staff evidenced by the drop in the amount of workers affiliated to the Social Security system (see the map on the Monthly change in the amount of workers affiliated to the Social Security system in sales, services and trade during the pandemic). Just 26% of sales, services and trade companies continued to work with no remarkable disruptions throughout the period in which the state of alarm was in force, whilst 32% reported that they were forced to close, and the rest continued to operate yet a reduced level of activity was to be introduced (survey carried out by the National Statistics Institute entitled confidence indicators. Opinion module on COVID-19). The reduction in the amount of affiliated workers was especially relevant in some regions, such as the Balearic Islands (Illes Balears), the Canary Islands (Canarias), the Region of Valencia (Comunitat Valenciana), the Region of Murcia (Región de Murcia) and Andalusia (Andalucía), where trade accounts for a significant part of the economy. Whilst the Region of Murcia (Región de Murcia) and Andalusia (Andalucía) began to see some signs of recovery from the summer of 2020 onwards, the Balearic Islands (Illes Balears) and the Canary Islands (Canarias) returned to the recruitment cycle that existed prior to the pandemic, yet with much lower figures. As indicated in the report on the impact of COVID-19 carried out by the Ministry of Work and Social Economy, the service sector was slow to recover.
The drop in the amount of workers affiliated to the Social Security system came together with a negative evolution in registered unemployment. In absolute terms, all regions registered an increase in the amount of unemployed, as evidenced by the map on the Monthly evolution in registered unemployed in sales, services and trade during the pandemic.
In addition, over a million workers in the sales, services and trade sector were furloughed in 2020 (see the graph on the Monthly evolution in the amount of furloughed workers in sales, services and trade during the pandemic), with April seeing the highest figures. From then on, employees began making a steady and rather quick return to routine work, and by September of the same year, just under 200,000 workers in the sector remained on furlough. This pattern was similar to that observed in the national economy as a whole, as evidenced by the sector’s percentage share on the total amount of workers on furlough, which ranged from 28% to 30%.
The sudden arrival of COVID-19 and lockdown led to a major slowdown in the retail sector. The graph on the Evolution in sales index and occupancy rate in retail trade shows that sales plummeted by around -32% during the first months of the pandemic in Spain (March-April 2020). Once the initial shutdown ended, the comparable sales rates remained negative, as many businesses were either not allowed to open or could not financially justify opening due to the restrictions imposed. As the lockdown measures were gradually loosened, a commercial landscape of businesses that had closed or been forced to change direction began to emerge. Only essential traders, such as food and pharmaceutical suppliers, escaped the closures. As a result, this key indicator of the commercial scene, which has always followed a positive trend, registered negative figures in February 2020. The effects on employment in this sector were even worse, with the positive pre-pandemic figures experiencing a remarkable fall during the pandemic.
The restrictions brought in to lessen the effects of the pandemic led to other changes for commerce, such as the public turning to local businesses for their essential products and, most importantly, the increase in the amount of people using e-commerce. Large distribution chains and smaller shops were forced to adapt to online trading as lockdown turned what had previously been a steadily growing trend into a sudden and widespread shopping habit. That said, even the sales volumes registered by e-commerce businesses took a hit during the darkest days of the pandemic, yet they picked up quickly as traders learned to adapt, and by the fourth quarter of 2020 had reached impressive figures.
The economic crisis filtered into the real-estate market and financial operations right from the very beginning of the pandemic, resulting in an extraordinary drop in the amount of mortgages signed from March to July 2020 compared to the same period of the previous year, with pre-pandemic figures remaining elusive until the summer months (General Council of Notaries Public, 2021). Moreover, the banking industry’s concern about possible defaults on mortgages combined with the uncertain outlook in the initial stages of the pandemic caused Euribor to rise, although it remained in negative territory. This could have further discouraged buyers and shrank the property market. Nevertheless, despite this initial reaction, 2020 eventually ended with a drop in Euribor and an uptick in new mortgages, yet figures remained below those registered in 2019. The worst figures in 2020 were registered in April, and the decrease in the amount of mortgages granted came together with a drop in the average amount offered (Mortgage Statistics, National Statistics Institute, 2021).
Advanced services, which are high-value added and high quality specialised services whose main resource is knowledge, are crucial for the competitive positioning of companies and regions and played a crucial role in overcoming the health and economic crisis. Despite their importance, however, employment in this sector initially took a knock, registering 50% fewer affiliated workers in April 2020 than in 2019, yet figures did begin to pick up in May (General Treasury of the Social Security, 2021). In the first year of pandemic and within the advanced services sector, research activities, consulting and computer programming saw their affiliate numbers grow by 3.1%, 2.8% and 2.7%, respectively (Figures on Affiliation to the Social Security system, General Treasury of the Social Security, 2021). The urgency of medical and pharmaceutical research and the need for companies to adapt to a new context defined by home office, the electronic provision of services and a sudden increase in the demand for computer security go a long way to explaining this positive trend.
Activity of notaries public
Activity of notaries public registered a remarkable drop, with notaries only attending to urgent matters during the initial weeks of the state of alarm (second half of March, April and May 2020).
Three indicators may illustrate the impact on their operations. The amount of mortgages signed in March, April and May 2020 fell by 50.1% compared to the same period in the previous year (it shall be noted that most of the operations carried out were for mortgages that had already been granted prior to the pandemic and could not be delayed without serious penalties for the client). The decrease in notarial acts related to inheritance was even more pronounced, with the deeds signed in 2020 amounting to just 30.9% of those signed in the same period of 2019. And finally, the deeds executed to grant general powers of attorney in March, April and May 2020 amounted to just 26.9% of those executed in the same period in 2019.
Co-authorship of the text in Spanish: María Pilar Alonso Logroño, Gema González Romero and María Dolores Pitarch Garrido. See the list of members engaged
Adaptation of the text and translation into English for this international version: Andrés Arístegui Cortijo (Translator in chief)
- INSPECCIÓN DE TRABAJO Y SEGURIDAD SOCIAL (2020): Impacto del COVID-19 sobre las estadísticas del Ministerio de Trabajo y Economía Social. Diciembre 2020. Ministerio de Trabajo y Economía Social. Available in: https://www.mites.gob.es/ficheros/ministerio/estadisticas/documentos/Nota_impacto_COVID_Diciembre-2020.pdf
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