What is the relevance of the international turnover of Spanish companies in relation to GDP?


What is the relevance of the international turnover of Spanish companies in relation to GDP?

imagen What is the relevance of the international turnover of Spanish companies in relation to GDP?

Should the government of Spain take into a account the peculiarities of the sector in its foreign promotion policy?

Should the governments of the community and city council of Madrid promote their metropolitan area as a world reference center for the sector?

To answer the previous questions, it is best to provide some data that supports the answer.

The weight of the construction sector in Spain has been varying from 9% in the mid-90s, reaching a maximum in 2006 with 12.1% and since then falling progressively until stabilizing around 6%.

In the period 1995 – 2006 the average annual growth rate of construction stood at 14.6%, well above the rest of the sectors – agriculture 2.9%; industry 6.5%; services 9.7% and GDP 9.8% -.

Between 2007 and 2008, pre-crisis years, growth in the sector fell to 3.9% and 2.2% respectively – in the case of GDP the growth was 7% and 3.3% -. The definitive arrival of the economic crisis at the end of 2008 was dropped like a slab on the sector that began to chain negative growth rates since 2009 (-6.9%); 2010 (-18.6); 2011 (-16%); 2012 (-14.8%); 2013 (-14.3%); 2014 (-0.9%).

These six years of crossing the desert meant the disappearance of some companies, the purchase of some by foreign capital, the merger of others, working at a loss in many cases and, for all of them, a rethinking of their strategy in the national market. In this context, going abroad became, in many cases, the only way to survive.

Construction has thus become, possibly, the most internationalized sector of the Spanish economy. This internationalization began in the 1960s with large companies entering foreign markets thanks to the preparation of their engineers, the management capacity of the companies and the Spanish concession system, copied worldwide. Fernando Gutiérrez de Vera was one of those pioneers and his concession model was copied until it was implemented throughout the world.

This initial international vocation in search of new markets was strongly promoted with the arrival of the 2008 crisis and the need to tender abroad in order to survive. In this way, it is estimated that around 70% – 75% of the turnover of Spanish companies comes from abroad, some of them exceeding 90%.

In the following graph you can see this strong rise and the positioning of Spain, only behind China, whose special characteristics usually leave it on the margins of any comparison between countries.

The consulting firm Deloitte annually prepares the free-access report, Global Powers of Construction [deloitte.com], which analyzes the construction sector worldwide, providing data, including income obtained by the top 100 companies in the sector. , of which seven are Spanish.

If we compare the weight of the turnover of these companies with respect to the GDP of their country, we can know the relative importance that the construction activity of their companies has for each of them.

The following table shows the ratio of company income (Sales) to the GDP of each country (GDP). The GDP data is obtained from three different estimates made by the International Monetary Fund (IMF)[1], World Bank (WB) and the United Nations (UN).

Country Sales / GDP IMF Sales / GDP WB Sales / GDP UN
CHINA 5,41% 5,84% 5,91%
SPAIN 5,03% 5,37% 5,26%
GREECE 4,72% 5,15% 5,25%
AUSTRIA 4,66% 5,10% 5,00%
SOUTH KOREA 5,10% 5,27% 4,85%
SWEDEN 4,88% 4,99% 4,60%
FRANCE 4,57% 4,80% 4,52%
JAPAN 4,33% 4,51% 3,86%
PORTUGAL 1,50% 1,59% 1,58%
ITALY 0,88% 0,95% 0,90%
NETHERLANDS 0,82% 0,90% 0,88%
FINLAND 0,84% 0,90% 0,85%
NORWAY 0,73% 0,69% 0,83%
AUSTRALIA 0,79% 0,81% 0,78%
MEXICO 0,54% 0,64% 0,71%
ISRAEL 0,60% 0,62% 0,67%
INDIA 0,57% 0,63% 0,67%
DENMARK 0,65% 0,67% 0,66%
TURKEY 0,55% 0,62% 0,55%
CANADA 0,45% 0,44% 0,47%
SWITZERLAND 0,43% 0,46% 0,46%
TAIWAN 0,40%   0,40%
THAILAND 0,33% 0,39% 0,33%
CHILE 0,27% 0,32% 0,30%
BELGIUM 0,20% 0,21% 0,21%
BRAZIL 0,06% 0,07% 0,08%
GERMANY 0,04% 0,04% 0,04%

Leaving China aside, Spain is the country in which the turnover of construction companies has the greatest weight in relation to its GDP, more than 5%.

The case of Spain is peculiar given the high degree of internationalization of these companies, which is around, on average, 80%. Thus, the percentage that these companies contribute to the Spanish GDP through their businesses abroad would be a minimum of 4%. This is an example of the competitiveness and experience of Spanish companies that allows them to stay ahead of the rest in international competitions.

Understand, the foreign promotion policy of the Government of Spain should take into account its contribution and peculiarity, unique in the international arena.

Furthermore, construction is not a consumer product but rather a structural one that lasts for decades or centuries. The mark that construction companies leave in the countries in which they work is also a reflection of their capabilities to execute the works and the image that is transferred lasts throughout the life of the built asset.

Governments such as the Chinese one have realized this factor and the relevance of the presence of their construction companies outside their territory, this being a strategic activity of their foreign policy.

The objective of MWCC is to promote the sector, take advantage of the entire Spanish ecosystem, concentrated in Madrid, and maintain the leadership of Spanish companies abroad. But until we are convinced of our capabilities, that we are the reference country in construction internationally and that Madrid is the World Capital of the Sector, we will not be able to take advantage of all the potential we have in Spain.