Catalan self-determination process does not affect foreign investment, says Barcelona Chamber of Commerce
Between 1993 and 2014, a growing trend of foreign investment was registered in Catalonia, a study by Barcelona’s Chamber of Commerce shows. This upward trend continued unbroken in the long-term, not even being interrupted by the decline of -15.8% recorded in 2014. According to the study, it is not possible to conclude that – over the period analysed – investment in Catalonia "has been adversely affected by the political context", in particular the Catalan self-determination process. In addition, for 2015 – even after just the first few months of the year have passed – the business environment seems to suggest that investment in productive capacity will be higher than in 2014.
Barcelona (ACN).- Between 1993 and 2014, a growing trend of foreign investment was registered in Catalonia, a study by Barcelona’s Chamber of Commerce shows. This upward trend continued unbroken in the long-term, not even being interrupted by the decline of -15.8% recorded in 2014. According to this study, it is not possible to conclude that – over the period analysed – investment in Catalonia "has been adversely affected by the political context", in particular the Catalan self-determination process. In addition, for 2015 – even after just the first few months of the year have passed – the business environment seems to suggest that investment in productive capacity will be higher than in 2014.
The President of Barcelona's Chamber of Commerce, Miquel Valls, opened the presentation of a new study on foreign investment in Catalonia saying that it confirms what this institution has been stating for some time: the Catalan self-determination process has not been affecting foreign investors' decisions, especially if the long-period series is taken into account.
Ramon Rovira, Head of Studies at the Chamber of Commerce, stated that it is "misleading" to consider data related to foreign investment year-by-year, drawing conclusions based on annual variations. Indeed, he explains, yearly oscillations may create strong distortions and confusions. In order to overcome this issue, the Chamber prepared its study on the evolution of foreign investment taking a much longer period into consideration, with the aim of detecting "the underlying trend''.
Between 1993 and 2014 a growing trend of foreign investment was registered in Catalonia, despite the cyclical fall of -15.8% recorded in 2014 (in comparison with 2013 figures). Nonetheless, if the available data on foreign investment are evaluated in a wider temporal context, one is able to notice that the level of foreign investment in 2014 was higher than the equivalent flows in 2012 and virtually the same as in 2011.
The study also refers to the absolute amount of foreign investment in Catalonia, showing that between 2012 and 2014 the average amount stood at around €3 billion per year, with small upward and downward fluctuations. In addition, the absolute amount of foreign investment that this Autonomous Community was able to attract at the end of the historical series is "significantly" higher the historical average for the time period 1994-2014.
Catalonia's share in Spain's foreign investment increased after the economic crisis
Between 1993 and 2007, Catalonia's share in foreign investment in Spain decreased. However, with the start of the economic crisis, the Chamber of Commerce indicates that this figure has increased, reaching 16.8% at the end of 2014, while in 2008 it stood at 7.9%.
Between 2009 and 2014, Catalonia's most active sector in attracting foreign investment was undoubtedly the industrial sector, which accounted for 35% of total FDI. This represents a much higher value than that recorded for Spain, where the same sector represented 29% of total foreign investment, without taking into consideration Catalonia's data.
This difference is even more relevant if data from the manufacturing sector are considered, as in Catalonia it accounted for 29% of total FDI (compared to 19% for Spain as a whole).
The Chamber's study also analyses a ranking of the top 20 subsectors for FDI inflows both in Catalonia and the whole of Spain. The information collected shows that for the former, nine out of the twenty subsectors are part of the industrial sector, while for the latter this is only six out of twenty.
Storage and transport activities attracted the largest amount of foreign investment
In Catalonia, storage and transport activities attracted the largest amount of foreign investment, accounting for 10.8% of total FDI, followed by the agro-alimentary industry and real estate, which have a 9.7% share each.
On the other hand, in Spain the top three subsectors for FDI inflows are financial intermediation, real estate activities and telecommunications, all belonging to the service sector.
The Chamber's study makes a distinction between the statistics from the Spanish Ministry of Economy and Knowledge and those from the Catalan Ministry for Business and Employment. The basic difference between the two lies in the fact that for the former, business operations aimed at purchasing shares and controlling a certain company fall within the category of foreign investments, although they do not necessarily represent an increase in the productive capacity of the economy.
The authors of the study also highlight that the Spanish Ministry of Economy and Knowledge assigns to the Autonomous Community the foreign investment which is effective. However, when this specific information is not available – which is often the case – the Ministry allocates the investment to the registered office of the company, mainly based in Madrid, therefore distorting the accuracy of the available statistics.
The Catalan Ministry for Business and Employment excludes from its statistical series purely financial investments, such as the purchase of companies or mergers and real estate transactions in sectors such as trade and distribution, the public sector and the public infrastructure sector.
Productive investment grew by 27% since 2008
The study also analyses the evolution of total productive investment – both foreign and domestic – during the same period, comparing the results with the figures related to foreign investment. The data collected show that total productive investment, excluding the construction sector in Catalonia, is currently 11.9 % lower than in 2008, while foreign investment increased by 26.6 %.
36% of companies will invest this year
On the occasion of the new study's presentation, the Chamber of Commerce also disclosed the results of a survey on the 2015 investment plans of 3,000 Catalan companies. This shows that 36% of the companies surveyed will invest in Catalonia, 4% in Spain as a whole and 2% abroad. Industry and the construction sector are the sectors where the greatest investment activity is expected in Catalonia.
The employers who took part in the survey say that the main factors affecting their investment behaviour are firstly market demand and, lastly, the institutional context.