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Key Trends and Opportunities in the Spanish Construction Market

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Reviewed

Jul 11 2013

Research and Markets has announced the addition of the "Construction in Spain - Key Trends and Opportunities to 2016" report to their offering.

During 2000-2007, the Spanish economy recorded an average annual growth rate of 3.8%, which can be attributed to growth in the Spanish construction industry. Factors such as low mortgage rates and investment by domestic as well as foreign investors helped drive the construction industry. Owning a home has become a part of the Spanish psyche and the ratio of owner occupied housing units to total residential units (house ownership) in Spain is over 80%. As the global economic crisis became more prevalent, the construction industry was severely impacted. Uncertain economic scenarios started dampening consumer sentiment causing a decline in investment from foreign countries in real estate property. Unemployment increased rapidly and many households found it difficult to repay their mortgages, impacting the demand for residential properties. The outcome was the Spanish economy falling into recession in the third-quarter of 2008, contracting by 3.7% in 2009 and by a further 0.2% in 2010. The Spanish construction industry recorded a CAGR of -2.89% during the review period.

Key Highlights

Residential construction was the largest construction category, representing 48.5% of the construction industry value and recording a CAGR of -6.12% during the review period.
Spain's housing bubble is one of the major reasons the country finds itself in a difficult economic situation. Spain now has over a million unsold properties and hundreds of housing developments left unfinished by construction companies. A quarter of the country's workforce is unemployed and Spanish households are facing increasing economic pressure.
The infrastructure construction market valued EUR73.1 billion (US$101.8 billion) and represented the second-largest share of 30.2% of the Spanish construction industry in 2011. Spain is investing heavily in high-performance rail networks and under PEIT, 48% of EUR250 billion is anticipated to be allocated to the rail category.
The commercial construction market declined at a CAGR of -4.65% to value EUR26.2 billion (US$36.5 billion) in 2011. Consumer spending is cautious owing to large household debt, high unemployment rates and a depressed economic outlook.
Industrial construction, with a share of 3.2%, was the smallest market in the Spanish construction industry and recorded a CAGR of -4.58% during the review period.