Spanish Construction Expected to Reflect Moderate Growth of 1.05%, Finds Timetric08 Aug 2012 • by Natalie Aster
Between 2000 and 2007, the Spanish economy recorded an average annual growth rate of 3.6%, which was attributed to the growth in the Spanish construction industry, and in particular the growth of residential housing in the country. However, the growth in the Spanish housing segment was unsustainable, as the number of housing completions exceeded the rate of new household formations in the country. As a result, the Spanish construction industry recorded a CAGR of 2.89% during the review period.
Within the Spanish construction industry, residential construction was the most adversely affected and recorded a CAGR of -4.91% between 2006 and 2010. In contrast, commercial construction in Spain demonstrated the strongest performance, with a CAGR of 1.51% during the five-year period. Between 2011 and 2015, the large quantity of newly built unsold housing, office and retail space, and other categories stock is expected to reflect the moderate growth of 1.05% in the Spanish construction industry.
In 2010, residential construction accounted for 50.7% of the Spanish construction industry. Single-family housing constituted the largest category, with a 53.1% share, followed by new multi-family housing with 32.6%, while residential building redevelopment accounted for the remaining share in 2010. Prior to the global financial crisis, the strong growth in the Spanish housing market was driven by low interest rates, extended mortgage periods of up to 50 years, favorable tax incentives on mortgage payments as well as house ownership and the inflow of foreign investment. However, as the housing and property market recorded a downturn, in 2010 an estimated 1.4 million new houses remained unsold in the country.
The new report "Construction in Spain – Key Trends and Opportunities to 2015" by Timetric states that infrastructure construction was the second-largest market in the Spanish construction industry. During the review period, rail infrastructure emerged as the largest category, with an increase of 13.6 percentage points (pp), while the road infrastructure category reported a 4.8pp decline during the same period. The increase in rail category was attributed to the increased focus on the rail sector, as part of the Strategic Infrastructure and Transport Plan (PEIT) 2005 to 2020 unveiled by the Spanish Ministry of Development in 2004.
Construction in Spain – Key Trends and Opportunities to 2015
Published: July, 2012
Price: US$ 1.250,00
The Spanish commercial construction market recorded a CAGR of 1.51% during the review period, which represented the strongest performance within the Spanish construction industry. In terms of commercial construction, the office buildings category was the largest within the Spanish commercial construction market, with a 42.5% share in 2010. With tourist inflows into Spain increasing in 2010 and 2011, construction activities are expected to resume from 2012 onwards when the current stock of unsold space is consumed. During the forecast period, the commercial construction market is projected to record a CAGR of 0.78%.
The institutional construction market represented a 7.3% share of the Spanish construction industry. During the review period, the research facilities and institutional buildings categories drove the institutional construction market, recording CAGRs of 11.38% and 4.38% respectively. Industrial construction market represented the smallest market in the Spanish construction industry. It recorded a CAGR of -1.00% and a 3.4% share of the Spanish construction industry during the review period.
More information can be found in the report “Construction in Spain – Key Trends and Opportunities to 2015” by Timetric.
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