What does the end of the year hold? Outlook Q4 2023

The Spanish Chamber of Commerce has updated upwards the forecast figures for the growth of the Gross Domestic Product (GDP) for this year to 2.1% (vs. 1.9% initially expected), but cuts the figure to 1.7% for the year 2024, six tenths less than initially expected. 

The projected slight increase in GDP for 2023 suggests a slightly more favorable economic environment in the near term. We believe that this can be translated into a certain dynamism in job creation, and in fact at the moment our perception is that this dynamism is actually taking place at the turn of the summer.

However, the projected decline in GDP growth by 2024 poses some challenges. This is a slight slowdown, and therefore, we do not expect a sudden slowdown, but it could lead companies to adopt a more cautious stance, which could affect investment and business expansion. This, in turn, could slightly reduce demand for employment. And we speak in conditional since we do not think that it will necessarily be so. 

As we know, managerial positions are vital for strategic decision-making and the direction of organizations. In times of economic growth, companies often look to managerial talent to lead new initiatives, manage growing teams, and make important investment decisions. But companies also tend to strengthen themselves at the managerial level in times of crisis, usually to lead more complex and less rewarding projects (business unit closures, divestments, cost reduction, etc.).

Therefore, even in unfavorable times for the economy, there is movement in the segment of managerial positions. The worst moments are undoubtedly when there is uncertainty, that is, when there is no visibility about what is going to happen (the covid19 era and the first months after the pandemic is a clear example of this).

And today, while there are some important challenges on the table, these are identified and moderately controllable aspects:

– High interest rates (but signs have already been released that they won’t rise much higher)

– Inflation still high (especially core), but in a containment phase

– Small fall in exports (because some of the foreign economies are suffering more than the Spanish economy), but offset by strong domestic demand

– Slight slowdown in the economy (but far from a recession, at least in Spain)

In conclusion: although the macroeconomic scenario for 2024 is not extremely positive, we do not see arguments that lead us to think that the labour market (and especially in managerial positions) will be negatively impacted in the latter part of the year (nor for 2024). 

In fact, with regard to the labour market, the Chamber of Commerce anticipates that we will end 2023 with an unemployment rate of 12.7%, and that this rate will continue to decrease in 2024 to 12.5%, so not only would jobs not be destroyed, but jobs would be created even in a context of economic slowdown. 

As we know, these are assumptions and forecasts, but we think there are reasons to remain cautiously optimistic. 

Álvaro Cárcel, Partner.