April 20, 2021

The Spanish economy is creating twenty times more construction companies than industries

The Spanish economy is creating twenty times more construction companies than industries


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Twenty construction companies are created for each new industry that is born in Spain. It is the disparate proportion that is taking place in our country since the economic recovery started, at the end of 2013. In this last quinquennium, the construction sector has gained weight with 20,300 more companies, compared to the barely 2,100 that has joined the industrial sector.

According to the records of the Social Security, in Spain there are currently 1.35 million companies with employees – the figure does not include self-employed workers who do not have workers under their care-. Of those 1.35 million companies, 993,000 are in the service sector, almost 125,000 in construction, 109,000 are industrial companies and 120,000 are in the agricultural sector.

As a whole, all sectors have more companies than five years ago, but not all have expanded with the same intensity. Proportionally, the one that has gained the most weight has been the construction. Currently there are 20% more construction companies in Spain than five years ago, while the census of industries has increased by a mere 1.94%, that of service companies has grown by 7%, and that of agricultural companies has increased by 12% In addition, to that strong increase in the number of construction companies must be added that of real estate companies, those in charge of managing the brick business, which for statistical purposes are included in the services sector.

There are currently 7,700 real estate agents active more than five years ago. The 12% of the service companies that have been created in Spain in the last five years have been real estate. Its proliferation is being much faster and more intense than what is occurring in the construction sector itself. Thus, since January 2014, the list of real estate agents has grown by 28% in Spain.

In global computation, the brick business now has a total of 160,000 active companies, 28,000 more than five years ago. Of those 160,000 brick companies, some 125,000 are construction companies-dedicated to carrying out works-and 35,000 are real estate companies-in charge of asset management, purchase, sale and rental.

Housing market

This accelerated increase of construction and real estate companies is taking place, to a large extent, in the heat of the reactivation and increase in the housing market. Some experts warn of the risk of a new overheating of the real estate sector; others, however, consider that we are still on a natural path of recovery after the severe subsidence that occurred during the crisis.

The economist and professor at IESE José Ramón Pin believes that it is "logical" the large number of construction companies that have been created in recent years. «It is a logical phenomenon for two main reasons, he explains: firstly, because years ago there had been a great mortality of companies in that sector; and, secondly, because it is less expensive and less complex to create a construction company or a real estate company than an industrial company ».

Although the list of brick companies has grown rapidly in Spain in the last five years, today the size of this sector is still much lower than at the height of the real estate "bubble". At the end of 2007, when the crisis broke out, Spain had almost 300,000 companies of this type in operation -226,000 construction companies and 66,000 real estate companies-; almost double what there is now.

The challenge of added value

But the fact that it is "logical" that in recent years many more construction companies are being created than industries does not necessarily mean that it is ideal. Between the logical and the convenient, often, there is an important stretch. And in this case there is: «If we look for a growth of the labor market with stable jobs and good salaries, we must encourage added value activities», indicates. And he emphasizes: «that type of activities of value added occur, fundamentally, in the industry and in the companies of professional services of high qualification. For example, in engineering consultancies, technological or specialized cabinets in branches such as Law or economic and business management ».

Choices to choose, this expert believes that it is more interesting to grow with more vigor in added value sectors than in the brick business. "If we compare the Spanish productive fabric with that which occurs in countries like Germany, France or even Italy, in our case the weight of the industrial sector is lower," says this economist. But, at the same time, he insists that this commitment to high added value sectors should not be limited to the industrial sector alone, and -says- not all industries provide the same added value. In the end, it depends on which productive activities are developed.

For this reason, José Ramón Pin insists that "the Spanish economy needs more companies in activities that provide more added value". And he cites, as an example, industries with a high R & D component; agricultural holdings "that go ahead of the demand" and are very competitive inside and outside of Spain; or highly qualified service companies in segments of special economic relevance or those directly related to the fields of new technologies.

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