Foreign investment in Spain amounted to 23.48 billion euros, thus consolidating the recovery

In net terms (gross investment minus divestment), productive investment closed the year with a balance of 17.54 billion euros, 2.1% down on the 17.9 billion posted in 2015. The volume in 2016 is very significant when compared with an exceptional 2015, in which certain one-off operations were recorded that increased investment significantly. Furthermore, this volume is posted in the midst of a weak international backdrop, with across-the-board falls in investment flows.

Total direct foreign investment (including Foreign Securities Holding Companies; Spanish acronym: ETVEs - which are financial and do not generate significant real economic effects) amounted to 33.1 billion euros gross, 30.8% up on 2015; and 25.74 billion euros net, up 33.5%. Investments by ETVEs stood at 9.62 billion euros, 527% up on the previous year, with net growth of 498%.

The figures for foreign investment in Spain are in contrast with the international economic panorama, with a generalised fall in investments between countries. In fact, the United Nations Conference on Trade and Development (UNCTAD) forecast a generalised fall in flows of between 10% and 15%.

The figures for direct investment flows, both foreign investment in Spain and Spanish investment abroad, tend to be very volatile. It should be taken into account that five operations may amount to some 85% of total investment in any given month, and hence a delay in presentation by investors may distort comparisons. For this reason, it is necessary to compare average figures over several years. Specifically, the comparison of the 2016 figures with the average gross investment flows over the last five years shows a 32% rise in gross terms and a 66% rise in net terms. Meanwhile, divestments in 2016 were below the average over the last five years.

Investments in the constitution of companies or increase in the capital of pre-existing companies represented 48.8% of total gross investment, a 29% decline on 2015. The remaining 51.2% corresponds to the acquisition of pre-existing shareholdings in companies.

In terms of productive investments, the main countries of origin were the United States, with 4.97 billion euros (21.2% of the total volume and a rise of 126%), followed by Luxembourg (10.5%, 2.47 billion), Holland (9.5%, 2.23 billion) and Germany (9.4%, 2.21 billion).

OECD countries account for 85% of all investments, up 4.5%, despite investments from the EU (50% of the total), falling by 21%. Investments from Latin America, representing 10% of the total, increased by 14%.

The main sectors to receive foreign productive investment were electricity and gas supply, with 4.07 billion euros (17.3% of the total and a 10.1% increase on 2015), followed by real estate activities, with 3.22 billion (13.7% of the total and an 11.2% increase) and financial services, with 1.82 billion (7.8% of the total and a 242% increase). These were followed by auxiliary activities to financial services, civil engineering and building construction. The latter was the leading sector in 2015, with 4.55 billion euros of investment.

The Region of Madrid, with 10.97 billion euros (46.7% of the total and an increase of 6.3%) and Catalonia, with 4.86 billion euros (20.7% of the total and a decline of 1.3%) received the majority of all productive investment, as was the case in previous years.

Spanish investment overseas

Total direct Spanish foreign investment in 2016 amounted to 33.77 billion euros in gross terms (23% less than in 2015) and 28.71 billion euros in net terms (a fall of 1.2%). Productive investment (excluding ETVEs) amounted to 23.45 billion euros gross (down 43.2%) and 19.73 billion euros net (down 29.2%). These declines are due to the statistical effect caused by one-off extraordinary operations in 2015. Total gross investment remains at the same levels as the average of the last five years and is almost double in net terms compared with the average of the same period.

The main recipient of Spanish productive investment was the United Kingdom, with 8.6 billion euros (37% of the total and an increase of 126%), followed by the United States, with 2.32 billion euros (10% of the total and a fall of 80%), and Holland, with 2.06 billion euros (8.8% and an increase of 195%). In general, Spanish investment in the EU increased in 2016, while it fell in other geographic areas, such as Latin America and OECD countries.

Spanish foreign investment was mainly focused in 2016 on wholesale trade and intermediate trade, financial services, the manufacturing of non-metallic mineral products, construction and real estate activities.