Africa Asia Europe North America South America Oceania
You are here: Home > Europe > Spain

Economy and business in Spain

Spain's economy is ranked as the fifth largest in Europe, by Germany, France, the UK and Italy. The country's most important export products are motor vehicles, metals and metal products, footwear and textiles, as well as food and beverages. Imports are dominated by crude oil, machinery and metal products, chemical products and foodstuffs. Like other countries in Europe, the service industry and industry are the largest sectors of the economy.

Business and Economy of Spain

The economy grew sharply in the late 1990s and much of the 2000s, but in 2008 the country was hit by the global financial crisis and entered the longest period of recession in the era of democracy. The downturn lasted until 2013, when the economy again grew. During this period, unemployment rose to over 27 per cent, while it declined to 15 per cent in 2018.

Financial overview

According to countryaah, the Spanish economy has fluctuated sharply in recent decades. In the late 1990s, the country's economy was improving; the rise in prices and inflation went down, as did the bank interest rate. The economic growth of the early 2000s helped the country to enter the European Monetary Union early. In the decade from 1995 to 2005, unemployment fell from 25 to 8 percent, the lowest level since the 1970s, and by 2008 the Spanish economy was steadily and noticeably improving, with growth above the EU average.

Traditionally, Spain has been an agricultural country with the production of grains, vegetables, citrus fruits, olive oil and wine, but much has changed over the last fifty years. Although agriculture is still important, an increasing proportion of the working population is working in industrial and service occupations, and employment in agriculture has fallen sharply. Around 75 per cent of the working population are employed in service industries (2017). The tourism industry is of great importance to the economy. Tourism in Spain accounts for 14.9 per cent of the country's GDP and 13.7 per cent of employment (2017). However, the largest export revenues come from the industry, especially the machinery and transport industry.

Spain joined the EU in January 1986. After Spain also joined the EMU sets EU stringent fiscal policy and the country must comply with the convergence requirements for including deficit in the state budget and the limitations of public debt. In turn, membership led to a liberalization of the economy and a massive influx of foreign investment. Europe is Spain's most important trading partner, and almost two-thirds of Spain's goods exports go to other EU countries. Spain has also benefited from support from the EU's Structural Funds, which has had a major impact on regional development. In 2012, the EU provided a loan of up to EUR 100 billion as a rescue package to the crisis-hit banking and finance sector in Spain.

Agriculture

About 25 percent of the country's area is arable land, and almost 10 percent are permanently cultivated, while about 20 percent are natural meadows and pastures. However, part of the agricultural area is not productive, partly due to poor soil and low rainfall, but also due to the use structure and social conditions. Intensive agriculture is primarily run where there are opportunities for irrigation. The first large sluice and irrigation plant, the Canal Imperial de Aragón on the Ebro River, was built in the late 18th century. In the southeastern corner (Almeria, Murcia and Alicante), traditional agriculture has largely been replaced by greenhouses.

Grain cultivation is important and occupies well over a third of the agricultural area. Large areas are also used for growing grapes, and Spain has long been one of the world's largest wineries. In 2017, Spain produced 32.1 million hectoliters of wine, of which around 22.8 million hectoliters went to export. Significant quantities of barley, sugar beet, wheat and corn, potato plants, tomatoes, onions, peppers, citrus fruits and olives are also grown.

In the north and northwest there are many small farms, in Spanish minifundios. These are generally poorly mechanized and therefore provide low labor productivity. In the Meseta and southern Spain, the uses are greater, especially in Extremadura, La Mancha and Andalucía, where the major goods dominate. In Spanish they are called latifundios. These are often 5,000 acres or more, but have often been characterized by low land use and extensive operations. Considerable areas have been used for beef farming or hunting terrain.

The use structure has long prevented the efficient use of the land. An agricultural reform, passed in Andalucia and Extremadura in 1985, gives the regional authorities access to the expropriation of underutilized land for transfer to user cooperatives of farmers. Although the policy of expropriation was long abandoned, it was resumed in 2011.

Barley and wheat are widely grown on the meseta and in the southwestern parts of Andalusia. In addition, barley is cultivated in the driest areas in the southeast. Maize is mainly grown in humid Galicia in the northwest. A significant part of the country's potatoes are also grown here. Rice is grown using irrigation in the provinces of Valencia, Seville, Murcia and Tarragona (at the Ebro Delta).

Typical Mediterranean growths such as citrus fruits, olives and grapes are important export products. Around 50 per cent of wine production takes place in Castilla - la Mancha. Other important wine districts are La Rioja in the Ebro Basin, and not least the districts at the mouth of Guadalquivir, where the town of Jerez de la Frontera is a major center of world sherry production. Citrus fruit is grown along the Mediterranean coast, mainly from Castellón ('the Valencian country') and Valencia and south to Malaga.

Spain is the world's largest producer of olive oil. Most of the production takes place in Jaen and Cordoba (Andalucia). Tomatoes, onions, peppers, and snake cucumber are grown extensively for export in so-called huertas in the provinces of Alicante, Valencia, Murcia and Almería. In the Canary Islands, bananas and tomatoes are grown. Animal husbandry is substantial and prevalent in the north (Galicia and Asturias), where grazing opportunities are best. The goat does well in the dry, southeastern regions, while pig breeding is widespread in Extremadura and Galicia.

Exports of important growth as of 2017

Product Ton
Tomatoes 809 527
Pears 119 000
Strawberry 264 513
Peach 199 551
apples 123 086
Salad 761 905
Paprika 686 558

All figures are taken from FEPEX.

Forestry

Spain's best forest areas are found in the northern mountain areas, and conifers account for most of the timber production. During periods of low rainfall, forest fires are a serious problem and a threat to the environment. Important deciduous species are oak, beech and eucalyptus.

After 1940, forestry has been a high priority, both to increase the country's timber production and as a remedy for soil erosion. The timber production is divided into softwood, wood pulp, cellulose and fuel. Spain is the world's second largest cork producer, after Portugal. Production takes place mostly in Extremadura, Andalucia and Catalonia. Spain accounts for 30 percent of the world's cork production.

Fishing

The country has been a fishing nation since Roman times. Spain is the EU's largest fishing nation, ahead of Denmark, the United Kingdom, France and the Netherlands. The main fish species are cod, haddock, whiting, tuna, sardines, octopus and shellfish. Spain's fishing fleet fishes along the coast of Spain, the Canary Islands and the Mediterranean, but is largely offshore, and also operates at Newfoundland, Greenland, Iceland, the Barents Sea, the Svalbard Zone, and along the coast of Africa and the Indian Ocean. The fleet has on several occasions been involved in conflicts concerning illegal fishing in other countries' zones.

Important fishing ports are Las Palmas de Gran Canaria, Vigo and La Coruña in Galicia and Malaga in Andalucía. There is also a growing fish farming industry, which today accounts for more than 30 percent of the fish that is traded in Spain.

Mining

Spain has some rich mineral deposits. There are around 3,600 mines, both open and underground. Several of the mines are open to visitors, such as Rio Tinto in Huelva and Agrupa-Vicenta in Murcia. The mining sector employs around 30,000 people in direct positions. Since the 1990s, mining policy has been adapted to EU requirements.

In addition to being important to Spain's industry today, the country's rich mineral deposits have formed the basis of business for several civilizations throughout history. While the Phoenicians operated salt extraction in Spain 1000 years BCE. , the Romans created coins of silver from Rio Tinto in Huelva. The Romans also knew about Spain's lead deposits. The country has large deposits of iron ore, and during the industrial revolution, Spanish iron ore was sought after. In the 20th century, coal and iron ore clays in the north of the country were especially important to the country's economy, and coal and iron ore have largely formed the basis for today's heavy industry..

Spain's heyday for coal production was in the first half of the 20th century. The largest coal mines are in Asturias, Galicia, Castilla-Leon, Aragon, Catalonia, Castilla la Mancha and Andalucia. During Francisco Franco's dictatorship, coal production was maintained, but declined in the latter part of the 20th century. In the period 1998-2009, the decline in coal production was significant, falling from 31 million tonnes to 9 million tonnes.

Accidents are rare, but in 2013 six people were killed in a mining accident in Leon. The mining accident was the largest in 18 years. In 2016, one more miner lost his life in an accident in Cangas del Narcea in Asturias. Spain also has large copper deposits in Andalusia, and there is gold in Asturias. Copper and gold mining has been increasing recently, as has the production of tungsten and lead. Other important minerals are zinc, manganese and mercury.

Like many other Mediterranean countries, Spain has a significant production of salt and covers its needs as well as exports. Salt is extracted by evaporation of seawater or from quarrying or dissolution of rock salt. Salt production takes place mostly in Catalonia, Aragon, Navarre, Cantabria, Valencia and Andalucia. In addition, Spain is one of the world's largest natural stone producers and Europe's largest granite producer. Most of Spain's granite is mined in Galicia. Castile-Leon has a significant production of slate.

Energy

Spain is dependent on imports to meet its energy needs. Since 1990, Spain has been investing heavily in renewable energy from hydro and wind power as well as solar cells. Large water reservoirs are built in the mountainous areas, especially in the precipitous regions of the north and northwest. The pond plants often serve irrigation purposes as well. Spain is also one of the world's leading producers of wind power, with over 20,000 turbines distributed over more than 1,000 wind farms, with a production capacity of 23,057 MW. Around 33 per cent of the energy comes from renewable energy sources (2017).

The electric power comes to a lesser extent from natural gas, petroleum and coal. Since 1960 there has been a marked transition from coal to petroleum. Spain has crude oil and gas, but only to a small extent. Nigeria, Mexico and Saudi Arabia are the country's largest supplier of crude oil, and Algeria is the main supplier of natural gas to Spain.

Spain has ten oil refineries. Two of them are in Tarragona and another two are in Castellón and Cartagena along the Mediterranean coast. On the northern Atlantic coast of Bilbao and La Coruña there are two refineries, and two in Andalucía, in Huelva and San Roque (Algeciras). There is a refinery in Puertollano (Ciudad Real) inland and one in Tenerife. Spain has seven active reactors distributed over five nuclear power plants. In 2017, around 20 per cent of the electrical power came from Spain's nuclear power plant.

Industry

After World War II, Spain invested heavily in building industry, and the country quickly evolved to become one of Western Europe's major industrial nations. During General Francisco Franco's dictatorship, the country went from a policy of protectionism and self-sufficiency to a somewhat greater degree of liberalization of the economy and less state control. The industry encompasses a wide range from the food and textile, shipbuilding and metal products industries, through the automotive and building industries to the advanced electronic industry.

In 2004, 30 per cent of the working population in the industry, including power generation and construction, worked, and the sector contributed an almost equal share of GDP. When the financial crisis hit the industry in 2008, a sharp decline in employment in the industry was recorded.

Industrial industries such as the shipbuilding, steel and textile industries, in addition and regardless of the financial crisis, have had marketing problems and major problems in recent years, and have been forced to restructure and cut back. In the steel industry, for example, many thousands of jobs have been lost since the 1980s as a result of the downturn. As a result of EU membership, an increasing proportion of industry investment has taken place in areas near the Mediterranean coast. In the past, the industry has mainly been concentrated in Northern Spain (especially Asturias and the Basque Country) and in the Madrid and Barcelona areas.

Spain is a major shipbuilding nation, with shipyards including Ferrol in Galicia and the Cádiz Bay. Spain also has shipyards in Barcelona, Cartagena and Bilbao. The shipbuilding industry has also faced difficulties, especially during the downturn of the 1970s, with the loss of thousands of jobs. Since 2000, however, there have been signs of improvement, with increased world trade and greater demand for ships.

Spain is among the largest car manufacturer in the world, and the second largest car manufacturer in Europe, after Germany (2018). Spain's car industry accounted for over 2 million jobs in 2017 and 10 percent of the country's GDP. In 2017, more than 2.8 million vehicles were produced, of which around 1.4 million were passenger cars. Seat (Volkswagen) is the country's largest car manufacturer. Other important car manufacturers are Opel, Ford, Peugeot, Citroën and Mercedez-Benz. The metalware industry is found in many cities, including Barcelona, ​​Bilbao, Malaga, Cartagena and Gijón. The production range includes household and kitchen equipment and various machines.

The textile and footwear industry is located in the Barcelona area and in the provinces of Valencia and Alicante. The footwear industry consists mainly of small businesses.

The center of gravity of the chemical industry has traditionally been in the north, with the center in the Barcelona area. Substantial government and private investment has made the chemical industry a growth industry with the production of acids, paints, plastics and fertilizers.

Since 1990, significant investments have been made in the electronics industry, with the production of computer processors and data equipment, industrial robots, advanced communication equipment etc. The production of telecommunication equipment and computer equipment, especially in GPS technology and aircraft navigation, has seen tremendous growth over the last decade.

Tourism in Spain

Spain is one of the world's foremost tourist countries, with 82 million visitors from abroad in 2017. Around 1 million Norwegians visit Spain every year. It is charter tourism that is leading, but there is also a varied range of cultural tourism and winter sports.

Transport and Communications

Spain's road network is of high quality. The country has Europe's longest motorway network, with a total distance of around 17,000 km, ahead of Germany's around 13,000 (2018). The main road network in Spain radiates star-shaped from Madrid, a pattern that was designed all the way to the late 18th century. A number of main roads have been converted into autopistas (highways) with tolls. A large proportion of the highways are publicly financed.

Railway

The development of a Spanish railway network began in 1848 with a line Barcelona-Mataró. In the second half of the 19th century, the network expanded greatly, with Madrid as a center. The Spanish railway is state-run, but it is open to private players from 2008. The total railway length is 15 900 kilometers (2014), of which about half are electrified.

After the Spanish Civil War, the material was heavily worn, and from 1941 the railways were run by the state (RENFE, the Spanish state railways). A major modernization program was launched from the mid-1960s. The comfortable Talgo trains are lightweight, fast express trains of Spanish construction. In 1992, a high-speed line was built between Madrid and Seville, AVE, a further development of the French TVG. At the beginning of the 2000s, a number of new routes got high-speed trains. This includes AVE to Malaga, Cádiz, Galicia, Valladolid, Barcelona, ​​Valencia and Alicante. The high-speed trains Alvia and Avant are slightly below the standard by default.

The Spanish railway network has a wider gauge than the European standard, constructed differently (from France's normal gauge) for defense purposes, and passengers must therefore normally change trains at the French border. Some of the new express trains have a mechanical solution that makes train change redundant. There are metro networks (metro) in the major cities. In 2003, Spain and Morocco agreed on the development of the railway tunnel during the Gibraltar Strait, but as of 2018, the project is still at the planning stage.

Aviation

The country's national airline, Iberia, was founded in 1927 and has a worldwide network of routes. The company was privatized in 2001, and in 2011 Iberia became a subsidiary of the International Airlines Group, together with British Airways. Other major airlines are Air Europa and Spanair. Low-cost airline Vueling (2004) has had routes to Norway since 2012.

Spain has 47 public airports with regular scheduled services, of which the most important airports are Madrid, Barcelona, Palma de Mallorca, Malaga and Las Palmas/Gran Canaria. Air traffic over Spain is controlled by Aena.

Shipping

Spain has one of Europe's largest trading fleets. With its convenient location in relation to the main routes of world shipping and the country's long coastline, Spain has long been a significant maritime nation. The main ports in terms of volume are Algeciras - La Línea, Barcelona, ​​Valencia, Tarragona, Bilbao, Vigo, Huelva and Santa Cruz de Tenerife.

Foreign Trade

Spain's main trading partners are France, Germany, Italy, the United Kingdom and the United States. The country has a considerable deficit in foreign trade, which was previously fully covered by tourist and service revenues as well as transfers from Spanish foreign workers abroad. In recent years, Spain has also had a deficit in the balance of payments, but a positive development in the Spanish export sector has been noted. The biggest increase is in the industry.

Foreign trade as a percentage by country 2017

Export Import
France 15.61 11.89
Germany 11.60 14.21
Italy 8.09 6.78
Great Britain 7.11 4.06
Portugal 7.26 3.72
United States 4.52 3.79
China 2.27 6.92
Norway 0.44 0.72

Main categories - exports

Food
Cars and transport equipment
mineral Products
Chemical products
Shoes and toys

Main categories - imports

Food
Chemical products
Cars, machines and transport equipment
mineral Products
Machines and electrical material
Mobile phones
Other Countries in Europe

Cheer Countries Copyright 2001 - 2020 All Rights Reserved