Spanish economy still addicted to bricks

| 13-07-2009 | Spanish Business | Written by Matthew Bennett

Surprise, surprise. Despite the recession, the disappearance of more than 70,000 estate agencies and the hundreds of thousands of newly-unemployed builders, the Spanish economy is still high on bricks and building sites.

Construction cold turkey in Spain?

The sector’s influence on Spanish GDP fell just 0.6% to 10.3% in the first quarter of 2009, almost twice the rate of everywhere else in Europe, according to Eurostat. Only Romania beats Spain in terms of construction as a percentage of GDP.

El País says analysts think the government’s investment in public works is keeping the percentage up that high and that it will surely fall when these construction projects are completed.

What that will mean for the Spanish economy nobody knows, but it can’t be good.

There will then be no real-estate activity, nearly a million empty houses, fewer construction companies, developers and estate agents and hundreds of thousands of former builders on the dole looking for new work, with or without unemployment benefit.

Spanish businessmen will be betting on Brits and Germans to save their bacon but with the recession raging from Newcastle to Nuremberg, I’m not bullish about hopes for Northern European residential tourists saving Spanish construction anytime soon.

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