DEFINITION OF GROSS DOMESTIC PRODUCT (GDP).
GDP is the monetary value of all the finished goods and services produced within a country's
borders
in
a
specific
time
period, though GDP
is usually calculated
on an annual basis.
It includes all of
private and public
consumption,
government
spendings,
investments
and
exports
less
imports that occur within a defined territory.
DEFINITION OF ACTIVE POPULATION: population that is either employed or actively seeking
employment.
DEFINITION OF INACTIVE POPULATION: comprises all persons who were neither "employed" nor
"unemployed" during the short reference period used to measure "current activity". This population
is split into four groups: Attendant at educational institutions; Retired; Engaged in family duties;
Other economically inactive.
CONSTRUCTION INDUSTRY:
In Spain construction activity is part of
the secondary sector of the economy. It
envolves preparing land for construction, as
well as building and repairing other physical
structures. There are three branches of the construction industry:
1. Housing: building and reparing houses and block of flats.
2. Commercial: building and reparing shops, offices, schools, hospitals and other buildings
where people don’t live.
3. Civil engineering: building and reparing infrastructure like roads, bridges, railways, dams,
canals, etc.
CONSTRUCTION INDUSTRY IN SPAIN:
In the past decades, construction industry grew
quickly for many reasons:
1.
Spain’s population grew, so it needed more
homes.
2.
Spanish people and foreigners, especially from
northern Europe, wanted holiday homes on the Spanish
coast.
3.
Sp
ain invested a lot of money in its
transportation system: building high-speed
train network and new motorways or airports.
Spain also received money from European
Union for infrastructure projects.
4. When Spain joined the EuroZone in 2001,
interest rates fell, which made mortgages
cheaper, so this made it easier for families to buy homes.
CONSTRUCTION CRISIS IN SPAIN.
Until 2008 the building of homes
increased year by year, but demand
increased even faster, so prices went up.
Some people bought only to speculate:
they didn’t want to live in their homes and
they just hoped that the price would go up
and then sell. In 2006, Spain built more
homes than Germany, UK and Italy
combined. Then, something happened to
reduce demand for new homes quickly:
1. In 2006, interest rates rose, which made mortgages more expensive.
2. From 2008, the world economy suffered an economic crisis, so people lost their jobs.
As a result of the economic crisis, government reduced investment in infrastructure projects
and businesses stopped building new offices or shopping centers. As a consequence, many
construction workers lost their jobs and lots of construction companies have gone bankrupt.