Spain

Overall construction activity

In 2024, construction activity continued to play a key role in the Spanish economy: in terms of Gross Fixed Capital Formation it represented 10,4% of GDP, in terms of Gross Value Added it represented 5,3% of GDP. 

In the description of the context that has conditioned construction activity in 2024, it must be highlighted the moderate growth in public tendering for civil works and intense in building, the low level of public tendering for concessions, the increase in the number of “visados” in the field of housing, the increase in the consumption of cement,  the problem of labour shortage, and the persistence of inflation with the consequent negative impact on public works because there is not an adequate price revision system.   

Price revision in public contracts is still a pending issue in the Spanish Law on Public Sector Contracts. It is essential to guarantee the economic re-equilibrium of public contracts in order to cope with the unexpected increases in the prices of energy, materials and wages. The fact that in our country companies cannot act by applying appropriate price revision clauses is having a negative impact on their competitiveness, if we compare the situation with other Member States where companies do have mechanisms to address this issue to a greater or lesser degree. The absence of price revision and, in addition, the fact that many public contracts are tendered at non-updated prices, have led in recent years to an increase in the number of tenders that do not receive any offer or tenders where there is only a single bidder. The CNC continues to call on the Government to adopt an appropriate system of price revision in public contracts. 

Regarding 2024, it must be noted the dramatic meteorological episode in several Spanish provinces at the end of October, that caused an irretrievable cost in terms of human lives and provoked a considerable disruption of economic activity in the damaged zones. Estimates would point to a negative impact of the DANA on the growth rate of Spanish GDP in the fourth quarter of the year of between 0,1 pp and 0,2 pp; it is expected that this adverse impact will be transitory and can be reversed if there is truly an effective deployment of support measures for affected families and businesses, and territorial reconstruction as soon as possible in 2025. 

On the other hand, it is worth mentioning the positive impact on our country of the European NextGenerationEU recovery funds, despite the fact that the sector envisaged a more agile implementation that would have contributed more significantly to economic growth in general, and to the activity in dwelling and building renovation and development of infrastructure projects in particular.

From the perspective of employment, the sector had 1,4 million workers in 2024, almost 7% of total employment in the country. One of the main concerns is the shortage of labour and the ageing of the active population without generational replacement. Only 10,3% of workers in the sector are under 30 years old, while the percentage of workers over 55 years old reaches almost 22%. In the last 10 years, the range of workers under 30 years old has decreased its share by 0,9 percentage points, in contrast, the range of those over 55 years of age has increased by almost 10 percentage points. 

In this section dedicated to presenting the panorama of the sector, the issue of housing must be included. In our country there is an urgent need to increase the creation of housing. The construction of at least 220,000 homes per year would be required in order to respond to the current housing shortage, which could reach a deficit of 2,74 million in 2039 if annual production does not considerably increase.   

To conclude and regarding forecasts for 2025, recent short-term indicators suggest that Spanish economic activity would continue to grow in 2025 but with the forecast of a gradual slowdown in the growth of activity. According to the macroeconomic projections published by the Bank of Spain in March 2024, GDP growth is expected to stand at 2,7% in 2025, 1,9% in 2026 and 1,7% in 2027. However, these projections are conditioned by the uncertainty arising from international trade and geopolitical tensions, with a downside risk to economic growth. As for the sector, a notable increase in residential construction activity is expected due to the Government's announcements to address the problem of housing shortage, and to a lesser extent in the residential renovation segment; non-residential construction and civil works would register more attenuated growth. 

Housebuilding

The number of “visados de dirección de obra” in terms of new dwellings in 2024 stated at 127 721, + 16,7% in comparison with last year. Despite this, less than 100 000 new units were built in 2024, insufficient result to respond to housing needs. In order to enable the increase of housing offer, it is essential to streamline the transformation and management of land, improve the permitting process, moderate the current taxation burden on housing, promote public-private partnerships to develop projects and guarantee a workable public funding allocation for boosting housing policies.

With regard to the renovation segment, it is worth noting again that the national Recovery and Resilience Plan is allocating around 10% of its budget to an ambitious renovation and urban regeneration plan, where residential renovation, linked to the improvement of energy efficiency, is the main field of action; in 2024 the number of “visados” for this purpose increased by 7% in comparison with 2023, however expectations were higher in the sector.

Non-residential construction

In 2024, this segment was driven by the strong increase recorded in the volume of public tenders for public social equipment of diverse type: administrative, educational, sport, terminals, etc. On the contrary, private activity, as it happened in 2023, registered a new decline in terms of “visados” (area to be built, m2).