The arrival of migrant workers between 2019 and 2024 has prevented four autonomous communities (Asturias, Castilla y León, La Rioja and Galicia) from losing active populations and mitigated the decline in the number of people wanting to work in Extremadura, where it fell by only 0.6%.
This conclusion is based on a study by Funcas included in its Economic Outlook for the Autonomous Communities 2025-2026, which highlights the “very important role” of immigration in maintaining employment in most regions: 62% of new assets in the Spanish labor market since 2022 were born abroad or have dual citizenship.
But this effect will moderate in the coming years: of the million new workers who arrived in the past three years, mobility will decline to about 850,000, according to calculations by the Economic Director of the Center for Studies, Raymond Torres. This is driven by one specific factor: housing.
He pointed out during the press conference, “Our expectations are also based on the moderate growth of the active population, which was the great architect of the expansionary cycle until this year, but as of next year we consider that this factor will lose its strength due to the housing crisis, with very high prices and the difficulty of finding housing, which makes the movement of national and international workers difficult.”
Growth is not only due to immigration
Castile and León gained 0.9% of assets, Galicia 1.7%, Asturias 2%, and La Rioja 3.7%. In all of these countries, migration has been essential to the sustainability of the labor market. In Extremadura it decreased by barely 0.6%, because the arrival of foreigners was not able to fully compensate for the departure of the active Spanish population.
In general, the effects were noticeable in all the autonomous communities, with the exception of the Canary Islands, the only ones that lost an active foreign population and were fully compensated by the Spanish people.
The more dynamic regions, such as the Communes of Valenciana (10.4%), Madrid (9%) or Catalonia (8.6%), have gained a more active population than the rest, mainly due to the attraction of foreigners.
Although this factor was key to explaining economic growth in recent years, which was higher in Spain than in the other partners, it was not the only factor. The economist explained, “Immigration alone does not explain this growth because other countries have witnessed very significant growth in immigration, but not economic growth.”
He explained, “In the case of the Spanish economy, the supply factor, which is immigration, comes along with other factors such as productivity, such as the strength of demand, such as tourism…” In some sectors, such as construction or hospitality, their contribution has been fundamental to “revitalizing” the productive fabric.
In this sense, the general director of Funcas, Carlos Ocaña, estimated that the most common scenario in his economic forecasts five years ago was the loss of population in certain parts of the territory and the arrival of foreigners was able to avoid this. “The entire migration flow has been reversed in some communities, for example Asturias, and we don’t know if this decline in population is in a structural way,” he said.
Two different growth paths
Funcas forecasts that five autonomous communities will grow above the Spanish average this year (2.9%): the Balearic Islands (3.5%), the Canary Islands (3.5%), Andalusia (3.3%), Madrid (3.3%) and La Rioja (3.2%). GDP growth overall will slow next year (1.9%), with five other regions recording a higher increase: Madrid (2.3%), Andalusia (2.1%), the Balearic Islands (2.1%), the Canary Islands (2%) and Catalonia (2%).
The report notes that “the slowdown will come from the expected moderation in the growth of the active population, given the prevailing situation of housing shortage and lower labor mobility that has already begun in the more dynamic regions. In addition, exports will continue to follow a conservative behavior, especially those in the automotive sector, and tourism will slow their growth.”
Funcas explains that in the future it is expected that there will be “two different growth paths” in the regions. On the one hand, for those regions such as those in the Ebro Valley, the Balearic Islands and Galicia, which suffer from low unemployment, increased productivity and the ability to attract new talent will be essential, which will require a greater effort to invest in productivity in human capital and housing. This group also includes Madrid and Catalonia, the most dynamic, where large active populations continue to arrive from abroad.
On the other hand, it includes those societies where unemployment is still high and they have their own productive capacity to grow. Here, developing active employment policies is essential to activate the integration of the unemployed and maintain growth.