Spain’s industry appears to have taken a real hit in 2012, that according to data recently released by PlasticsEurope Ibérica (Madrid / Spain; www.plasticseurope.org), which shows production dropping by 8.4% and demand by 5.6%. The national production and processing of plastics sector, which employs 72,000 people, closed the year with a turnover of approximately EUR 22.6m.

Packaging, which represents the largest demand for plastics in Spain, accounted for 47.4% in 2012 and saw little change over 2011 figures. However, the second-most important application, building and construction, seems to be bearing the brunt of the country’s overall recession with a share of 14.4%, well below “historical levels” according to the Madrid-based association.

Market share for the automotive sector was at 7% and fairly consistent with 2011 results. The association notes that the recently announced investment decisions by 6 of the 11 foreign car makers active in Spain are expected to have a positive impact in this industry segment. Spain’s fourth most important area, agriculture, represented about 5.8% of total plastics demand, which is a slight creep upwards from 2011 data.

In its release to the media, PlasticsEurope Ibéria stated that the downward trend in Spain, though deeper, is still in line with the numbers for Europe in general, where the production of plastics fell 3.8% and demand contracted by 3.2% representing 45.5m tonnes in the EU 27.

Indeed, Ramon Gil, the association’s CEO believes that with the intensive focus on R&D along with optimisation in processes and greater efficiency in utilisation of resources happening across the continent, both Europe and Spain will rebound from the weakened economic conditions prevailing in 2012 and early 2013 and will recover fully in terms of growth by the end of this year or latest in early 2014.

However, the verdict is still out on how soon Spain really can consider itself as a nation and its economy recovered. According to Reuters, the government has managed to reduce the budget deficit from 11.2% GDP in 2009 to 6.98% in 2012. Roughly 375,000 public sector jobs have been slashed and labour costs are down to levels last seen in 2005.

Still, Spain's unemployment rate is at an alarming 27% thanks primarily to the collapse of the country's construction boom and the workforce cuts in the public sector. On top of that, the country is still mired in debt, running a deficit of almost 7% of GDP in 2012. Over the last seven straight quarters the economy has been in retreat. Thus, experts say that if Spain wants to consider itself healed, it will need growth so that it can trim its debt, cut borrowing and create jobs. The key may be in lifting exports but with the euro zone still sickly, this will be no easy feat.