OREANDA-NEWS. The Autonomous Community of Cantabria is facing growing pressure from social spending due to its rising population, including of the elderly. However, it benefits from a high standard of living and a strong industrial sector, which contribute to potential new job creation opportunities in the region.

In 2015, 20.3% of Cantabria's population was over 65 (19.2% in 2001), and the National Statistics Institute reported that the region's share of people over 85 was 3.5% of the total, up from 2.3% in 2001. This trend is likely to continue and will increase pressure on healthcare and social services. The autonomous body Servicio Cantabro de Salud manages four public hospitals in the region with around 1,274 beds. Its budget expanded to EUR787m in 2016 (EUR591m in 2004), 32% of Cantabria's budget. It employs 3.3% of workers in the region.

Social spending also increased to EUR210.5m in 2016 (EUR166.7m in 2004) and represents 9% of Cantabria's budget. The Instituto Cantabro de Servicios Sociales finances nine residences for the elderly with 3,883 beds, partly addressing the needs of the population over 85 years, which totalled 20,508 in 2015.

Cantabria has a large number of small municipalities, particularly located in mountainous areas. This could add to spending pressure as Cantabria is responsible for providing financial and advisory support to municipalities for the maintenance of infrastructure and service provision. Thirty-three of its 102 municipalities have fewer than 1,000 inhabitants. However, 68% of Cantabria's population lives in the metropolitan area of Santander.

The structure of Cantabria's economy is similar to that of Spain, except that the industrial sector is stronger and broader, accounting for 18% of regional GDP in 2015 (15.5% for Spain), and is home to many export-oriented industrial enterprises. Santander has an important seaport for passengers and goods, which opens it to potential markets in the UK. Under Fitch's base case, Cantabria's economy is likely to grow 2.6% in real terms in 2016 and 1.9% in 2017, supported by domestic and external factors.

Cantabria's labour market has performed in line with that of Spain, but its employment rate has declined compared to the national average (46.2% in Cantabria against 46.4% in Spain), probably due to its aging population. However, the ongoing regional economic recovery should translate into job creation.