After seven years of contraction, construction in Spain is expected to pick up again in 2015, according to research company Timetric’s Construction Intelligence Center (CIC).

It said that in real terms, the industry’s output value was forecast to rise at a compound annual growth rate (CAGR) of 2.72% over the next five years, which it said was in sharp contrast to the 7.1% decline recorded during the review period of 2010 to 2014.

Consequently, it forecast the Spanish construction industry would rise from US$209.7 billion (€186.87 billion) in 2014 to US$239.8 billion (€213.70 billion) in 2019.

Timetric said the industry was expected to improve as a result of economic recovery, foreign investments and the return of business confidence.

Residential construction was the largest market in the Spanish construction industry during the review period, it found.

Sina Zavertha, economist at Timetric’s CIC, said, “The Spanish housing market is on a path to recovery, as evidenced by 0.2% increase in house prices in nominal terms in the fourth quarter of 2014 compared to the previous quarter of the same year.”

She added that the residential construction market was expected to flourish over the forecast period, as foreign investors looked to purchase both new and second-hand properties.

Infrastructure construction was found to be the second-largest market in the industry.

Timetric said that although transport infrastructure in Spain was highly developed, the government was keen to continue a process of modernisation and expansion by increasing investment spending in the 2015. The market is therefore projected to grow over the forecast period, supported by government focus on rail and road infrastructure.

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