The increase in employment and investment has moderated TFP growth to 0.8% in Q3 2025, after six quarters above 1%

The BBVA Foundation and Ivie have just released a new issue of the Productivity Tracker, with the latest data for Spain through September 2025

The BBVA Foundation and Ivie have just published a new issue of the Productivity Tracker, featuring the most recent data on productivity in Spain, corresponding to the third quarter of the year. During this period, total factor productivity (TFP)—a synthetic indicator of productive efficiency—grew by 0.8% year-on-year, 67% less than in the same quarter of 2024. This growth indicates that improvements in productive efficiency observed since early 2024 has lost momentum.

Hours worked grew strongly (2.4% year-on-year), while investment accelerated even more (7.3%) in Q3 2025. Strong increases in investment and employment are fueling GDP growth, while gains in productive efficiency have had a smaller impact.

More than half (51%) of the high GDP growth in the third quarter of 2025 (3.1%) came from job creation. Capital increased its contribution (23.1%) above that of previous quarters thanks to the acceleration of investment (7.3%). Meanwhile, TFP contribution slowed compared to 2024 and the first two quarters of 2025, although it remained positive (26%) and slightly higher than that of capital.

The intense growth of the factors causes labor productivity (per hour worked) to slow down, growing only 0.7% year-on-year, while capital productivity grew at similar rates to the previous quarter (1.02%) but remained below earlier periods.

TFP growth was strongest in construction (3.0%) and moderate in services (1.0%). In the primary sector, energy and manufacturing fell by 1.4%, 1.9%, and 0.8%, respectively. In the primary sector, this result is determined by a negative change in GVA, while in the latter two sectors, the decline is mainly due to intense job creation, which reduces productivity (-10.5% and -1.3%, respectively).

The data in this tracker reflects the latest update from Spain’s National Statistics Institute (INE) on quarterly accounts. Following this revision, TFP growth since 2024 is higher than the previous update. In contrast, the evolution of labor productivity remains similar and capital productivity shows an upward adjustment.