Spain Construction - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Spain Construction Market size is estimated at USD 192.55 billion in 2024, and is expected to reach USD 223.22 billion by 2029, growing at a CAGR of 3% during the forecast period (2024-2029).

The industry's development amid the figure period will be backed by ventures within the vitality, transportation, lodging, and mechanical segments.

Key Highlights

• The development industry in Spain is anticipated to extend by 3.5% in genuine terms this year, upheld by a positive base, coupled with ventures within the vitality and transport framework divisions and payment as a portion of the NextGenerationEU (NGEU) Recuperation Finance, beneath which, the government plans to spend EUR28.4 billion (USD 29.1 billion) in 2022. Despite this development in 2022, yield in genuine terms is still around 13% lower than in 2019, reflecting the industry's battle to bounce back from the COVID-19 disturbance. The brief terms viewpoint is additionally decently bleak, with the Spanish development industry anticipated to shrivel hardly by 0.3% in 2023, owing to headwinds caused by rising intrigued rates and tall vitality and development fabric costs. Concurring to the Eurostat, the normal development fetched file rose by 13.8% YoY within the seven months of 2022.
• However, there are a few positive signs of enhancement in common. For illustration, the nation added up to EUR15.6 billion (USD 16 billion) in remote ventures amid the primary half of the year 2022, which speaks to 53.4% year-on-year (Y-o-Y) development. Yield will moreover proceed to be supported by speculations within the electricity, transport, lodging, and mechanical divisions. Within the to begin with two rounds of the renewable vitality barters that the government held in 2021, the government granted 5.6GW of wind and 3.8GW of sun-oriented vitality capacity. In October 2022, through the third sell-off, the government apportioned 177MW - of which 31MW to dispersed sun-based photovoltaic (PV) and 141MW to biomass.
• For the improvement of the private division, in September 2022, the Spanish Government proposed a modern arrangement of remodeling around half a million homes by the conclusion of 2026, which includes an allotment of EUR6.8 billion (USD 7 billion) from the EU's following Era support.

Spain Construction Market Trends

Increase in housing construction drives the market

The market is expected to observe growth during the forecast period driven by the increase in housing permits issued. Spain is a popular, safe, and stable international destination for visitors, investors, and those looking to relocate with a rich cultural tradition. International interest from buyers both inside and outside the European Union is increasing. Real estate regained popularity, especially in seaside resorts and Spain's major cities. In terms of investment, Madrid, Valencia, and Malaga are the provinces with the highest possibilities for recovery.

According to the latest Ministry of Public Works data, construction costs in buildings, including labor and material consumption, have grown annually by over 14%. New non-residential construction, which includes office, industrial, and other building types, has climbed by 21%, a significant gain over the residential sector's growth of 10.6%. Building renovations, including work on residential and non-residential structures, rose by 12.8%.

Despite this situation, the primary indicators of the residential sector-such as building permits, the volume of transactions, and prices-remain in positive expansion for the time being. According to the most recent data, the pandemic caused a dip in housing approvals in 2020, which directly contributed to the loss in building completion certificates recorded in the first few months of 2022.

Increasing demand for leisure and hospitality development projects due to travel and tourism

In Spain, the hotel industry is preparing for tourism to resume its pre-pandemic levels. Investors are purchasing real estate that can be converted into hotels and land for new hotel construction projects. Southern Europe has been a popular travel destination, and in 2022, activity in Italy, Spain, and Portugal will virtually match pre-COVID levels. 2023 is expected to bring about growth and prosperity.

Hotel investment in Spain totaled EUR 3.3 billion in 2022. In contrast to 127 hotels and 19,043 rooms in 2021, 133 hotels and 17,754 rooms were transacted last year. Another 30 properties, including plots of land for hotel developments and structures for hotel conversion, were also bought and sold. By exceeding the EUR 3 billion mark and maintaining its position as the third-best record in the historical series, 2022 has come to a fantastic end in terms of hotel investment (up 3.1% from 2021). Additionally, money is being spent renovating some existing hotels to make them top-notch establishments capable of providing what modern tourists want after a protracted length of time.

Additionally, investors' interest in the 4- and 5-star categories expanded with the entry of foreign brands and hotel repositioning, with sales of these asset classes accounting for almost 80% of the overall investment volume. With 49% of the total expenditure, the 4-star category continued to be the most popular overall. Investment firms continued to dominate the investor landscape in 2022, accounting for 59% of the total volume invested. Additionally, hotel groups were quite active, bringing up 25% of purchasers (compared to 16% in 2021). Individual and family offices showed slightly more caution (5%), while REITs (6%) stayed consistent with last year.

Spain Construction Industry Overview

The market is fragmented with a large number of players, including Acciona SA, Elecnor SA, Fomento de Construcciones y Contratas SA, Dragados SA, Cobra Instalaciones y Servicios SA, Ferrovial, Obrascon Huarte Lain, Administrador de Infraestructuras Ferroviarias (Adif), etc. The competition amongst service providers is further heightened by the strict regulatory requirements that must be met. Businesses participate in M&A transactions to develop their product lines and expand regionally.

The report covers the major players operating in the Spanish construction market. The market is expected to grow during the forecast period due to the increase in construction investments, upcoming major projects in the country, and other related factors.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support