{"id":8128,"date":"2024-11-14T11:56:44","date_gmt":"2024-11-14T11:56:44","guid":{"rendered":"https:\/\/www.munich-strategy.com\/?p=8128"},"modified":"2024-11-14T17:34:25","modified_gmt":"2024-11-14T17:34:25","slug":"growth-market-spain-construction-supply","status":"publish","type":"post","link":"https:\/\/www.munich-strategy.com\/en\/growth-market-spain-construction-supply\/","title":{"rendered":"Whitepaper: Spain \u2013 The underrated growth market for German construction suppliers. Why expansion is worthwhile and how to succeed."},"content":{"rendered":"

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t<\/strong> <\/em>+49 (0) 89 1250 1590
\npresse@munich-strategy.com<\/a><\/span><\/h6>\n

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Dr. Sebastian
\nTheopold<\/h6>\n

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Diego
\nTerceros<\/h6>\n

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Dr. Sebastian Theopold<\/h6>\n

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Diego Terceros<\/h6>\n

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WHITEPAPER<\/span><\/strong><\/h6>\n

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11 \/ 2024<\/span><\/h6>\n

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Whitepaper: Spain \u2013 The underrated growth market for German construction suppliers. Why expansion is worthwhile and how to succeed.<\/h1>\n

[\/vc_column_text][vc_single_image image=”16″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column width=”1\/3″][vc_column_text css=”” el_class=”h8″]Our latest whitepaper demonstrates that Spain is currently an attractive expansion target for German construction suppliers. Spain has the fourth-largest construction industry in the EU and is growing more dynamically than other EU countries.[\/vc_column_text][\/vc_column][vc_column width=”2\/3″][vc_column_text css=””]<\/p>\n

Five key factors drive the Spanish market and ensure sustainable growth for the future. Entering the Spanish market can provide German construction suppliers with a safeguard against weaker economic cycles in other regions.<\/h6>\n

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Dynamic growth and robust market<\/h3>\n

With a construction volume of \u20ac161 billion in 2024, Spain has the fourth-largest construction industry in the EU after Germany, Italy, and France. This size indicates strong demand in residential, commercial, and infrastructure construction. With a projected average annual growth rate of +2.1% from 2025 to 2027, Spain is also expected to grow faster than comparable countries, which are forecast to grow only between +0.8% (Germany) and +1.8% (Sweden).<\/h6>\n
Study author Diego Terceros highlights the opportunities for new market entrants: \u201cEntering Spain provides the opportunity to leverage growth potential beyond the stagnating Central European markets and to reduce dependency on a few key countries.\u201d<\/h6>\n

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High investments support the sector<\/h3>\n

In addition to private investments, Spanish policies support infrastructure, urban development, and tourism-related construction projects to boost economic growth and create jobs. The construction industry contributes 11.7% to Spain’s GDP, a higher proportion than in many other EU countries. While transactions in the Spanish construction industry slightly declined in 2023 due to rising interest rates, a recovery is forecasted for 2024, with an increase in transaction volume from 2025 onwards.<\/h6>\n

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Five factors are driving long-term growth<\/h3>\n

Munich Strategy\u2019s analysis identifies five factors that will continue to stabilize growth in the Spanish construction industry in the future.<\/h6>\n
Construction Costs<\/strong>: The construction cost index shows that building in Spain is approximately 15% cheaper than in comparable countries.<\/h6>\n
Skilled Workforce:<\/strong> Employment in the construction sector in Spain is growing at an annual rate of 1.1%, while other countries report an average decline of -1.4%.<\/h6>\n
Government Investments:<\/strong> Public investment in construction projects is at least 2% higher than in comparable countries.<\/h6>\n
Housing Shortage:<\/strong> High demand driven by tourism and immigration has led to a housing deficit of 46% in Spain, which further encourages construction activity.<\/h6>\n
Inflation:<\/strong> At 2.4%, inflation in Spain is slightly lower than in other EU countries, which average an inflation rate of 2.6%. This creates stable conditions in the construction sector.<\/h6>\n

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Success factors for market entry<\/h3>\n
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The authors of the study outline key success factors for companies in the construction industry. In-depth knowledge of Spanish distribution channels is essential. A few large players dominate both the DIY (Do-It-Yourself) and retail segments. Similar to Germany, a shift from specialized retail toward DIY is expected. According to the study, both channels are crucial for establishing a foothold in the country. Product portfolios must be adapted to the Spanish market in terms of materials, certifications, and price levels. The competitive landscape is characterized by a multitude of small, local companies, presenting opportunities for consolidation, internationalization, and professionalization. Familiarity with Spanish work culture and regulations, along with partnerships and effective capital utilization, are also critical for market success.<\/h6>\n
Diego Terceros emphasizes the importance of a comprehensive approach: \u201cSpain is not a market for half measures. A successful market entry requires a long-term strategy and a sustainable presence that is continuously strengthened. Whenever possible, local partnerships should be established.”<\/h6>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Contents of the whitepaper (extract)<\/span><\/h2>\n

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