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. Spain 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.