Spain, the world's fourth most popular destination for greenfield projects
While the COVID-19 pandemic has had a negative impact globally, FDI figures now suggest that some degree of recovery is underway
According to the FDI Markets database (produced by the Financial Times Group), in 2020 Spain was the fourth largest European receiver of greenfield projects.
During this period, a total of 313 foreign capital greenfield projects have been carried out in Spain. While this is 42 percent down on last year, the fall at global level has been higher still. This has enabled Spain to reach the fourth position, which is an improvement on previous years: in 2019, it was in fifth place, and in 2018, seventh.
Moreover, if we focus solely on innovative activities and high technological content greenfield projects–R&D, establishment of corporate headquarters, ICT and internet infrastructure– during the same period, Spain was the sixth largest recipient after the United States, Britain, Germany, Ireland and India.
Importantly, the COVID-19 pandemic has had a more negative impact globally than was initially envisaged, and recovery is projected to be more gradual than previously predicted.
According to UNCTAD, both new investment announcements in new facilities and cross-border mergers and acquisitions fell globally by more than 50 percent in the first half of 2020 compared to last year.
And accordingly, the data provided by the Foreign Investment Register show that foreign direct investment (FDI) received by Spain in the first quarter of 2020 amounted to just over 2,646 million euros, about 60 percent less than in the first quarter of 2019. However, in the second quarter of 2020, the 4,642 million received represent an increase of 8% compared to the same period of the previous year, which, in half-yearly data, softens the fall to 38% in relation to 2019.
As we can see, it can also be inferred from the FDI figures that some recovery is underway, with a clear turning point when the lockdown ended. In July 2020, the FDI Index, which values foreign investor confidence, scored 795, slightly higher than in June and more than 80% higher than the April 2020 low of 439.
In recent years, Spain has proved hugely attractive to international investors, not only because of the volume of FDI, but also because of the quality of projects received. Seven of the ten years in which Spain has received the most FDI in its history have been in the last decade.