Lorraine Williamson
Spain’s labour market hit a significant milestone in the second quarter of 2025: for the first time in its history, more than 22 million people are in employment. According to the National Statistics Institute’s latest Active Population Survey (EPA), this growth coincides with the lowest unemployment rate since the 2008 financial crisis.
But while the headline figures are encouraging, there are still underlying challenges Spain cannot ignore.
Record-breaking quarter for job growth
Between April and June 2025, Spain added 503,300 new jobs, bringing the total number of people in work to 22.27 million. It marks the strongest second-quarter growth since 2023 and outpaces the same period in 2024. Although 2023 still holds the record with over 624,000 new roles, this year’s performance is part of a consistent upward trend in employment over the past decade—excluding the pandemic-hit 2020.
The unemployment rate has dropped to 10.29%, down more than a full percentage point since the previous quarter. That leaves 2.55 million people registered as unemployed, the lowest figure seen in 17 years.
Sectors fueling the surge
Hospitality led the hiring spree, adding 180,500 jobs—over a third of the total quarterly increase. However, despite the seasonal boost, the sector still employs fewer people than it did in 2024. It now accounts for 8.44% of total employment, slightly below last year’s 8.79%.
Manufacturing (+90,000 jobs) and trade (+64,200) also posted strong gains. Looking at year-on-year data, trade added the most jobs overall (+144,200), followed by manufacturing (+106,800) and transport (+81,300). By contrast, employment in education, domestic services, and healthcare all declined—raising concerns about long-term investment in public services.
More women in work than ever before
Women now hold more than 10 million jobs in Spain—a record high. While men secured more new jobs this quarter (53%), women have led overall growth over the past year. Compared to two decades ago, nearly three million more women are now in the workforce.
Men’s employment levels, by contrast, have remained relatively stable at around 11.88 million. This signals a slow but steady shift in the gender balance of Spain’s labour market.
Tourism and foreign workers still vital
As expected, foreign workers played a major role in second-quarter hiring. They took up 23% of the new jobs, especially in sectors driven by the tourist season. That share was slightly lower than last year’s 30%, but on an annual basis, foreign nationals still account for 64% of all new positions created since mid-2024.
Regional gaps still widening
While some provinces saw dramatic improvements—like the Balearic Islands, where unemployment halved from 14.8% to 7.4%—others continue to struggle. Unemployment remains highest in Granada (18.1%), Cádiz (17.95%), and Ciudad Real (16.9%). In contrast, Lugo and Soria have some of the lowest rates in the country, both under 6.5%.
Rural provinces such as Ávila, Segovia, and Lleida bucked the national trend by losing jobs in the second quarter.
A divided response
Spain’s Economic Ministry hailed the figures as a sign of robust economic health, citing 354,600 new permanent contracts and a 2.4% rise in total hours worked. Labour Minister Yolanda Díaz credited people-focused policies for the turnaround, declaring: “The Spain that some only dreamed of is now a reality.”
However, business leaders offered a more cautious response. CEOE, the national employers’ federation, praised the private sector’s role in creating over 480,000 jobs, but warned that unstable regulations and trade tensions could slow future growth. SME group Cepyme highlighted rising absenteeism and ongoing concerns about Spain’s stubbornly high youth unemployment rate—still sitting at 24.5%.
Persistent problems beneath the surface
Despite the headlines, deeper issues persist. The temporary contract rate has ticked up to 15.4%, and in the public sector it remains at a troubling 28%. That’s far above the EU’s legal ceiling of 8%, triggering a formal sanction.
Spain’s largest trade unions have raised the alarm. CC OO points to ongoing wage stagnation, job insecurity, and a widening gulf between well-paid permanent roles and precarious short-term contracts. Meanwhile, the UGT union warns that, despite strong numbers, job quality isn’t keeping pace.
A positive outlook, with caveats
Spain’s labour market has made historic progress, with over 22 million people now in work and unemployment at its lowest since before the financial crash. Yet the country still faces one of the highest jobless rates in Europe, particularly for younger workers. Unless deeper structural issues—such as temporary work, low wages, and poor regional cohesion—are tackled, this record-breaking growth may prove difficult to sustain.