Spain Construction Market Size, Trends and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis, 2022-2026
Summary
The construction industry in Spain is expected to expand by 3.5% in real terms this year, supported by a favourable base, coupled with investments in the energy and transport infrastructure sectors, and disbursements as part of the NextGenerationEU (NGEU) Recovery Fund, under which, the government plans to spend EUR28.4 billion ($29.1 billion) in 2022. Despite this growth in 2022, output in real terms is still around 13% lower than in 2019, reflecting the industry’s struggles to bounce back from the COVID-19 disruption. The short terms outlook is also fairly gloomy, with the Spanish construction industry expected to shrink marginally by 0.3% in 2023, owing to headwinds caused by rising interest rates and high energy and construction material costs. According to the Eurostat, the average construction cost index rose by 13.8% YoY in the first seven months of 2022.
However, there are some positive signs of improvement in general. For example, the country received a total of EUR15.6 billion ($16 billion) in foreign investment during the first half of the year 2022, which represents 53.4% year-on-year (Y-o-Y) growth. Output will also continue to be supported by investments in the electricity, transport, housing, and industrial sectors. In the first two rounds of the renewable energy auctions that the government held in 2021, the government awarded 5.6GW of wind and 3.8GW of solar energy capacity. In October 2022, through the third auction, the government allocated 177MW - of which 31MW to distributed solar photovoltaic (PV), and 141MW to biomass. Through the fourth auction ended in November 2022, the government has successfully allocated 45.5MW to onshore wind power in contrast to an expectation of 1.5GW of wind and 1.8GW of solar power. In another positive development, the Ministry of Transport, Mobility and Urban Agenda is working on an EUR4 billion ($4.1 billion) Arajas Airport Expansion Program for the expansion of Adolfo Suárez Madrid-Barajas Airport, construction work on which is expected to commence in Q4 2024 and end in Q4 2040. For the development of residential sector, in September 2022, the Spanish Government proposed a new plan of renovating around half a million homes by the end of 2026, which involves an allocation of EUR6.8 billion ($7 billion) from the EU's Next Generation fund
The report provides detailed market analysis, information and insights into the Spanish construction industry, including -
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