The ICEX headquarters hosted the presentation of the data from the VIII Barometer on the climate and outlook for British investment in Spain, by the British Chamber of Commerce in Spain and Analistas Financieros Internacionales (Afi).

The figures in this report show that the UK has the highest volume of FDI inflows since the beginning of the historical series dating back to 1993. The flow of British investment in Spain has increased, therefore, despite the Brexit referendum, the COVID-19 health crisis and the start of the Russia-Ukraine war. The volume of foreign direct investment (FDI) flows from the UK has gone from being the sixth largest for Spain in 2015 to the second largest so far in 2022. As such, the UK is ahead of historically important countries such as Australia, France and Germany, with the US at the top of the ranking.

Likewise, FDI flows to Spain have continued their growth trend, amounting to €5.524 billion over the past four quarters. This is double the figure for the four quarters between the second half of 2021 and the same period in 2021.

In terms of diversification, British investment in Spain is divided between services, industry and construction. In this regard, accumulated British FDI stock in Spain in 2020 was mainly focused on the telecommunications sectors, amounting to €9.625 billion, and followed by the energy sector with €6.673 billion.

During the presentation, the Secretary of State for Trade, Xiana Méndez, stressed that “Spain is a very attractive country as a destination for foreign investment due to its strengths. The investment received by Spain has withstood the pandemic and the current international context, and has experienced growth. Foreign investment in Spain did actually reach €15.66 billion in the first six months of 2022, which not only represents a growth of 87.7% compared to the same period in 2021, but also an increase of 4.6% compared to the average over the past five years.”

In addition, Xiana Méndez pointed out that British investment has also contributed to this growth. “As this barometer clearly shows, in the first half of this year UK companies have invested 261% more than in the same period in 2021. And the outlook for the future is positive, with over half of the UK companies surveyed planning to increase their investment in Spain next year.”

Current economic situation and outlook for 2023
Inflationary pressures and global economic uncertainty do not seem to be affecting British companies with investments in Spain, which say that they have perceived an improvement in the Spanish business climate compared to 2021.

72% of them thus consider the economic and business environment to be good or acceptable, representing eight percentage points more than in 2021. In fact, over half of the British companies surveyed plan to increase their investments in Spain next year,  expanding their lines of business in particular.

However, the war in Ukraine does seem to have had an impact, as 87% of British companies with investments in Spain claim to have been affected by the conflict, especially due to the increase in energy prices.

59% of the companies surveyed do at the same time consider that the increase in interest rates in the eurozone will be detrimental to their activity, since, among other things, it will lead to a fall in consumption and sales.