May typically brings a surge of optimism for Spain’s labour market, as businesses gear up for the busy summer period with a fresh wave of hiring – often resulting in record-breaking employment figures. This year follows the same trend.
However, unemployment has now dropped below the 2.5 million threshold – the first time in nearly 17 years – thanks to a reduction of 57,835 people, according to figures released on Tuesday by the Ministry of Labour.
The number of individuals registered with SEPE – Spain’s public employment service, responsible for managing and controlling unemployment benefits – stands at 2,454,883. This is the lowest since July 2008, just before a recession severely impacted the workforce.
While this milestone is significant, Spain continues to feel the lingering effects of that economic downturn. The country still reports the highest unemployment rate in the European Union, at twice the EU average.
Meanwhile, employment continues to grow year on year, though at a slightly slower pace than in 2024. In May, social security registered an average increase of 195,736 contributors, pushing the total close to 21.8 million (21,784,375).
Most sectors added workers in May, with the exception of domestic services, which lost 1,300 jobs. Unsurprisingly, hospitality led the way, accounting for half of the new hires (over 76,000), followed by administrative and support services (22,000), retail (9,300), and transport (more than 8,000), the latter recording the fastest year-on-year growth rate at nearly 7%.
Construction and manufacturing also saw gains, each adding over 7,200 contributors. The agricultural sector posted a particularly strong month, adding 18,230 new members – a 2.7% monthly increase.
However, there is a downside: most of the jobs created in May were seasonal in nature. Permanent contracts accounted for only 40% of the total, while temporary roles dominated. Among the permanent contracts, 37% were permanent-discontinuous contracts reactivated for the summer after months of inactivity, and 22% were part-time. This means precarious employment remains the norm, with only 40% of new permanent contracts being full-time.
Another concerning trend is the growing short-term nature of so-called permanent contracts. In May alone, 552,000 permanent contracts were signed, but they were distributed among just 521,000 people – indicating that 31,000 individuals signed more than one permanent contract within the same month, some lasting only days or even hours.
Since Spain’s labour reform took effect, 1.25 million people have had more than one permanent contract within a single working month.
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