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Spain Infrastructure Report Q2 2016

Spain Infrastructure Report Q2 2016

BMI View: We maintain our positive construction industry growth forecast for Spain in 2016 on the back of investment in transport infrastructure, particularly in the railway segment. Political uncertainty following the general election in December 2015 poses the main downside risk to our forecasts as it will deter much needed private investment into the sector, in addition to delaying policy making and the approval of infrastructure projects.

Latest Updates And Structural Trends

Growth in the Spanish construction sector will be driven largely by EU-backed developments in the rail sector, as well as economic recovery and investment-friendly regulatory changes in the renewable energy sector. However, the pace of growth will be moderate, particularly in residential building and public works, with economic growth and investor sentiment at risk from the uncertain political environment that followed the December 2015 general election.

We currently forecast Spain's construction industry to grow 4.5% in 2016 after an estimated 5.1% in 2015. Solid growth comes from a low base as the industry contracted for six consecutive years between 2009 and 2014.

Within the infrastructure sector we expect the railway subsector to attract the majority of investment. Evidencing this view, Development Minister Ana Pastor announced in May 2015 an investment of EUR1.26bn between 2015 and 2018 in suburban services on the national network, with Adif to provide EUR1bn and Renfe the remainder.

The Spanish energy ministry is adopting a new, more cautious and sustainable approach to attracting investment into the renewables sector that we believe will be a major test of investor confidence in the market. A new auctions-based system for awarding projects (as opposed to a fixed feed-in tariff) will ensure economic viability will form the cornerstone of future renewable energy projects.


BMI Industry View
Table: Infrastructure - Construction Industry Forecasts (Spain 2015-2021)
Table: Infrastructure Risk Reward Index (Spain)
SWOT
Infrastructure SWOT
Industry Forecast
Positive Growth But Risks To The Downside
Table: Construction And Infrastructure Industry Data (Spain 2015-2025)
Transport Infrastructure
Table: Key Projects: Transport
Energy & Utilities Infrastructure
Table: Key Projects: Energy & Utilities
Residential & Non-Residential Building
Table: Key Projects: Construction & Social Infrastructure
Industry Risk Reward Index
Spain - Infrastructure Risk/Reward Index
Rewards
Risks
NAWE Infrastructure RRI: Outperforming On Risks And Rewards
Table: North America And Western Europe: Infrastructure Risk/Reward Index
Market Overview
Competitive Landscape
Table: Spain: Key Company Financials
Methodology
Industry Forecast Methodology
Sector-Specific Methodology
Risk/Reward Index Methodology
Sector-Specific Methodology
Table: Infrastructure Risk/Reward Index Indicators
Table: Weighting Of Indicators

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