Danny Richards, Lead Economist at GlobalData, comments: “Construction projects have been severely affected due to the COVID-19 crisis. The contraction in the second quarter would likely be worse than the 9.1% contraction recorded in the first quarter owing to the lockdown and containment measures. In addition, the weaker economic activity will put pressure on the commercial, industrial and residential sectors.”
The tourism sector is the backbone of the Spanish economy, as it contributes around 6% of the country’s GDP. Travel restrictions imposed by the government have huge ramifications for all segments of the tourism sector. Due to the weak environment, projects in the leisure and hospitality buildings sector are likely to be halted due to a lack of financing.
Richards concludes: “The infrastructure sector is expected to face disruption in the coming months. The government had plans to upgrade the country’s road infrastructure with the Ministry of Development announcing a €5 billion (US$5.7 billion) programme to improve roads in Spain. It is expected that once the virus outbreak subsides, works will once again restart and further investment in infrastructure projects will be forthcoming to kick-start the economic recovery. However, there are concerns that the government will face a sharp deterioration in its fiscal position, undermining its capacity to accelerate infrastructure investment.”
