Most foreign companies will maintain their investment in Spain this year

The 14th edition of “Barometer of the business climate in Spain from the perspective of the foreign investor”, showed that 93% of foreign companies established in Spain plan to increase or maintain their investments in the country this year. The publication, carried out jointly by ICEX-Invest in Spain, Multinationals by Brand Spain and IESE’s International Center for Competitiveness, reflects the assessment and importance they give more than 730 foreign capital companies to the business climate in Spain.

For the Minister of Industry, Commerce and Tourism, Reyes Maroto,Spain is already in a phase of full economic recovery as confirmed by all the indicators and with good prospects for the future”. «Foreign companies are positively assessing that Spain is at the head of Europe in the deployment of European funds through the Recovery Plan, from which a first disbursement of 10,000 million euros has already been received due to the high achievement of milestones and objectives ” .

Regarding the results of the barometer, the minister highlighted that they reflect that Spain is one of the countries “more open to foreign direct investment, thanks to the certainties and security that we transfer to investors, and to the structural and regulatory reforms that the Government is promoting and that are going to have a great impact on improving the Spanish business climate”. In addition, the minister highlighted the results on issues of sustainability, “they indicate the awareness of consumers and Spanish society and especially, of the workers themselves in the matter”.

The barometer was presented at a conference that included the participation of the Secretary of State for Trade, Xiana Mendez; the executive director of ICEX-Invest in Spain at ICEX, Elizabeth Garcia Grande; the president of Multinationals for the Spain brand, Beatrice Blasco; the associate director of the Madrid Campus, IESE Business School, Maria Coello of Portugaland the associate researcher of the International Center for Competitiveness- IESE Business School, Maria Luisa Blazquez.

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Xiana Méndez has highlighted that the foreign sector is being an indisputable engine for the economic recovery of our country. “International trade has been essential for our economy by providing alternative markets for our companies”. In addition, it has influenced the intense recovery of export activity in 2021, which has reached historical figures: “Spanish exports of goods have not only exceeded pre-pandemic levels, but have also marked an annual historical maximum. It is the first time in the entire historical series that Spanish exports exceed the barrier of 300,000 million euros”.

The responses of the companies surveyed were collected during the last quarter of 2021 and also include the forecasts of these companies for this year, which allows the Spanish Administration to identify the strengths that exist to maintain, as well as the main areas in which to make more effort.

The business climate improves two points

In general terms, investing companies confirmed a clear improvement in their performance in 2021 and very favorable prospects for 2022 in all aspects analyzed (investment, workforce, billing and exports). The assessment of the business climate is 3 out of 5, which represents an increase of two tenths compared to the last edition. These results match those of 2019, before the pandemic, and show the recovery path of companies after the COVID-19 crisis.

The areas that have received the best rating from foreign investors have been those related to infrastructure and quality of life, clear strengths of Spain, followed by market size and human capital. It is positive that, again this year, the most valued areas coincide with the most important aspects for investors.

Among the least valued areas included in this edition are those relating to the regulatory environment, taxation and innovation. In particular, there is room for improvement in areas such as the adaptation of labor legislation to the needs of companies or the reduction of the bureaucratic burden. And costs, such as electricity, have also emerged as one of the main concerns this year.

Good prospects for the future

The investment trend that foreign companies have maintained in Spain during 2021 reflects a clear recovery compared to 2020. Thus, 90% of the companies surveyed increased or maintained their investments in 2021, compared to 69% in 2020. By 2022, 93% of companies plan to increase or maintain their investments.

Job prospects also improve substantially. Compared to 2020, the year in which 31% of companies claimed to have reduced their workforce, during 2021, only 12% reduced them, and 88% of the companies increased or maintained your number of employees. For 2022, the forecasts are even better and 94% of companies expect to increase or maintain their employees.

The billing figures in our country are the ones that improve the most in 2021. Compared to 54% of the companies that decreased their billing in 2020, only 14% did so in 2021. By 2022, 71% of companies expect to increase their turnover, 23% expect to maintain it and only 6% plan to reduce it.

Finally, with regard to the volume of exports, companies with foreign capital in Spain have a clear export profile, and 75% of them export to third markets from our country. In 2020, 26% of companies decreased their exports, but this percentage dropped to 9% in 2021 and by 2022 only 4% of companies expect their sales abroad to be reduced.

News: sustainability and recovery funds

As a novelty, a specific chapter on sustainability has been included in this edition, in which the strategies of foreign companies in Spain in this matter and the degree to which the conditions in our country favor the achievement of its objectives. Among the factors that most favor the development of sustainability strategies of companies in Spain, investors highlight the awareness of consumers and society and, especially, of the workers themselves. The responsible behavior of suppliers and customers is also pointed out.

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