Boston, MA -- (SBWIRE) -- 07/24/2012 -- The construction industry is a significant contributor to the Spanish economy and was the primary factor behind the robust economic growth in country recorded between 1997 and 2007. During the period, low interest rates, mortgages extending up to 50 years, favorable tax policies for house ownership, mass immigration from neighboring European countries and a surge of foreign investments in the real estate market, particularly from the UK and Germany, were attributed to the significant growth within the Spanish construction industry. By 2007, the Spanish construction industry's contribution to GDP reached 16%, compared with the EU average of 6%. However, in 2008, the sub-prime crisis in the US resulted in a global economic recession, which adversely affected the Spanish economy and the country's construction industry.
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Indeed, new housing starts declined from 762,000 in 2006 to 159,284 in 2009. During the period, the Spanish construction industry also employed 13% of the Spanish workforce and the housing crisis resulted in the loss of thousands of jobs in the construction industry in the country. As a result, the unemployment rate in Spain peaked at 21.3% in Q1 2011 before declining marginally to 20.9% in Q2 2011. 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.
- 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.
- Within the Spanish construction industry, residential construction was the most adversely affected and recorded a CARC of -4.91% between 2006 and 2010. In 2010, residential construction accounted for 50.7% of the Spanish construction industry.
- The infrastructure construction market valued EUR25.3 billion in 2010, and represented the second largest market in the Spanish construction industry.
- The Spanish commercial construction market declined by 6.5% in 2010. However, during the review period, the market recorded a CAGR of 1.51%, which represented the strongest performance within the Spanish construction industry.
- The institutional construction market valued EUR6.9 billion in 2010, represented a 7.3% share of the Spanish construction industry.
- The industrial construction market represented the smallest market in the Spanish construction industry and valued EUR3.2 billion in 2010.
Companies Mentioned in this Report: Actividades de Construccion y Servicios SA, Fomento de Construcciones y Contratas SA, Ferrovial SA, Acciona SA, FCC Construccion SA
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