Until 40% of companies that are in construction and agriculture have had labor shortages in 2021 and the Bank of Spain attributes it, essentially, to a drop in migratory flows as a result of the pandemic. Both branches of the economy are, together with the hotel industry, those that historically group the largest number of foreign workers and, in turn, those that have experienced the greatest lack of availability of workers.
The Covid-19 crisis had an unprecedented impact on migratory flows on a global scale. In the Spanish case, it is observed that in 2020 there was a decrease in the migratory balance of foreigners of 48%. This is due to the drop in arrivals, which went from 666,000 in 2019 to 415,000 in 2020. During the first half of 2021, meanwhile, the wave of departures continued, while arrivals continued to decline. This meant that for that period, the balance was practically nil (8,400 people). The evolution of inflows from Latin America is noteworthy, which fell from 47% in 2019 to 26% in the first six months of 2021.
The Bank of Spain maintains that the massive departure of so many migrants had a direct impact on the labor supply. While that of national workers had recovered its pre-crisis trend, that of the foreign workforce was still much lower. This has had a direct impact on hospitality, agriculture and construction, which are the sectors where the foreign workforce is most relevant, according to official data.
In the fourth quarter of 2021, 40% of construction and agricultural entrepreneurs admitted to having problems in their activity due to lack of labor. In the hotel industry the figure was 36.2%. Instead, the mean was 27.2%. At that time, these same sectors anticipated greater pressure on their labor costs. According to them, this would trigger the shortage of labor force would be reflected in the increase in wages.
The institution does not dare to predict how long this change in the pattern of migratory flows will last, nor the impact it will have on the labor supply. However, they trust increase migration as restrictions are relaxed of mobility imposed by the pandemic. In any case, the European Central Bank has already warned that some of the migrants who returned to their countries of origin may have resettled there permanently, which could reflect a rethinking of work-life balance. or the improvement of employment opportunities in their respective countries. Telecommuting agreements in the euro area could also favor this resettlement.
Both the Bank of Spain and the ECB believe that in the nearest horizon, the projections related to migratory flows continue to be subject to a high degree of uncertainty. What they do know is that worsening job prospects and widespread uncertainty induced by the pandemic had a deterrent effect on potential immigrants.
Apart from migratory flows, the Bank of Spain points out that the greater demand for personnel in certain sectors, as a result of the deployment of Next Generation funds, may be increasing the perception of labor shortages. This applies especially to construction, which accounts for 35% of the money that will be disbursed as part of the Recovery Plan. According to the institution, all European countries have as a priority, within the framework of the program, the same areas of the economy, so it is foreseeable that they will be hunting for the same employees and consequently the market will be stressed.