94% of Foreign Companies Will Increase or Maintain Their Investments in Spain

The Barometer of business climate includes the rating of more than 500 foreign companies


IESE Business School

94% of foreign companies expect to increase or maintain their investment levels in Spain / Photo: iStock

Over 90% of foreign companies expect to maintain or increase their investments, number of employees and revenues between 2015 and 2018. And the average rating of the country for engaging in their activity went up from 2.7 to 2.9 out of 5.

These are some of the data featured in the 8th edition of the "Barometer of the business climate in Spain from the foreign investor's perspective," a report co-produced by ICEX-Invest in Spain, the conglomeration Foreign Multinationals for the Spain brand  and the International Center for Competitiveness (ICC) at IESE.

The Barometer shows the rating and importance given to the business climate in Spain by more than 500 foreign companies. It provides insight into the strengths that need to be maintained and the central areas of activity to focus on.

According to the study, the key future prospects for investment by foreign companies in Spain are:

  • 94% of the foreign companies surveyed expect to increase or maintain their investment levels in Spain in 2015. This figure rises to 95% in their forecasts for 2016-2018.
  • The percentage of companies expecting to increase or maintain their workforce in Spain has gone from 87% in 2014 to 91% this year.
  • In terms of revenues, 64% of companies are anticipating an increase. Only 9% expect a drop in 2015, and that percentage falls to 4% in the forecasts for 2017-2018.
  • As for exports, just 3% expect to see a reduction in 2015, and 2% in the following years.

The Barometer also shows the trends identified by the source of funding for companies. In terms of investing in Spain, the plans of German, British and French companies are slightly above the average of the companies surveyed. Germany and Italy have the highest percentage of businesses with plans to increase or maintain their workforce in 2015. Companies with funding sourced from Germany and the United States are the most optimistic about increasing revenues in the coming years.

Infrastructure and Human Capital – Key Strengths

For foreign investors, infrastructure remains the most highly rated area, followed by human capital and quality of life. It is interesting to note the positive rating of airports and high-speed rail in relation to infrastructure. In terms of human capital, the availability of skilled labor and the quality of business schools are the aspects most highly rated by investors. All the areas studied show improved ratings compared to the 2014 Barometer.

The Barometer also highlights the areas that investors feel should remain priorities. This year, the cost of electricity takes center stage when it comes to finance-related aspects. This replaces previous years’ focus on the main opportunities for improvement.

The areas considered as priority are those with a greater difference between the importance and the weighted rating ascribed by investors. Along these lines, language skills is still considered the main problem, while adaptation of labor laws to the needs of the company is no longer one of the main concerns.