Spain’s Economy: Tourism, Industry, and Construction

Tourism in Spain

Tourism is one of the main drivers of the Spanish economy. It provides high income, helps offset the trade deficit, and employs abundant labor. Spain is the second country in the world that receives the most tourists, after France. In 2004, Spain received 53.6 million tourists (compared to 16 million in the UK, with a significant portion visiting Catalonia).

The tourist resources of Spain began to be exploited in the 1950s, when improving living standards of the European middle classes allowed vacation travel periods to become a mass phenomenon. Sun and beach tourism were basically promoted, and the areas that developed the most were the Mediterranean coastline and the Balearic Islands.

These areas underwent a profound metamorphosis within a few years due to the rapid construction of many tourist centers, often without prior urban planning and without considering the environmental impact of seasonal tourism. This type of tourism, concentrated in the months of July and August in coastal areas, remains the principal form in Spain. Tour operators and travel wholesalers sell packages of hotel stays in beach areas at very low prices and move large numbers of people, thereby ensuring hotel occupancy for almost the entire summer season.

However, in recent years, cultural tourism and nature tourism have gained importance. These types of tourism are less seasonal and have enabled the development of the sector in inland areas and mountain areas, and have extended the season. Domestic tourism has also become increasingly important, thanks to the rising living standards of the Spanish population, who travel for cultural tourism, adventure sports, etc., in winter or throughout the year.

Industry in Spain

Spain is currently among the leading industrialized countries in the world. However, the industrialization process initiated in Spain in the 19th century was primarily located in Catalonia and the Basque Country. The lack of energy resources and raw materials, delays in the construction of the railroad, and the low presence of an industrial bourgeoisie were among the factors that explain why industrialization did not spread until the second half of the 20th century.

The energy crisis of the 1970s forced the restructuring of the industrial sector to modernize production. Unproductive companies were closed, and new technologies were introduced.

Membership in the EU (1986) demanded a continuation of restructuring. This resulted in significant job losses, especially in sectors such as iron and steel, shipbuilding, textiles, and footwear. Since the 1990s, investments in R&D have increased, specializing in the most dynamic sectors of industrial activity, such as electronics and information technology.

Leading Industrial Sectors

The sectors that have adapted to become more competitive are those where foreign capital has a significant presence. Examples include automobile manufacturing and the chemical industry. Industries related to new technologies have also grown.

Some current problems of Spanish industry include the predominance of small and medium-sized enterprises, the need for more research to achieve greater productivity, the need to control certain environmental impacts, and relocation.

Construction in Spain

The construction subsector is of great economic importance in Spain. Construction employs more than 10% of the active population (PA), and the country’s economic growth in recent years has been based largely on construction. The great development of construction has led to industrial growth in cities, population growth, the expansion of tourism on the coast, and the improvement of public infrastructure.

Currently, housing construction accounts for nearly 50% of all sector activity in Spain. The rest of the activity is split between civil engineering works and non-residential buildings. The significant weight of housing construction cannot be explained solely by population increase; a good share is second homes, and many homes are bought as investments, often by foreign capital. The boost from construction has positively affected companies that provide materials for construction, such as cement, steel, ceramic, and glass industries.