Spain has served as a global model of freedom and human rights since the peaceful transition to democracy after former Head of State and dictator Francisco Franco’s death in 1975. Although its economy was strong and growing immediately after the country joined the EU in 1986, it entered a severe economic depression in mid-2008. The economy has turned around in the past several years, and Spain now enjoys strong GDP growth of 3%, exceeding the EU average.
Spain is about five times the size of the U.S. state of Kentucky. Bordering countries include Andorra, France, Gibraltar, Portugal and Morocco. It also has borders on the Mediterranean Sea, Bay of Biscay and the Atlantic Ocean, and sits along the Pyrenees Mountains. The capital of Spain is Madrid.
Manufacturing in Spain
Spain manufactures textiles and apparel, footwear, food and beverages, metals, chemicals, automobiles, machine tools, medical equipment, footwear, pharmaceuticals, clay and refractory products.
Industrial production is growing at about 4% annually as of 2017. Industry accounts for 23.2% of Spain’s GDP.
Other Important Industries
Tourism and services make up about 74.2% of Spain’s GDP.
The country is about 54% agricultural land and 36% forests. About 9% of the agricultural land is devoted to permanent crops and 20% to permanent pasture. Primary agricultural products include grain, vegetables, olives, wine grapes, sugar beets, citrus, beef, pork, poultry, dairy products and fish.
Supply Chain Infrastructure for Manufacturing
The supply chain infrastructure in Spain is strong due to its robust transportation and communications systems. Virtually 100% of the population has a cellphone, and the country has broadband internet connections in nearly 30% of homes and 100% of businesses. As far as Spain’s transportation system, it’s rail system is the most developed and one of the best in Western Europe.
Spain has 99 airports with paved runways, most of which can handle freight planes. As a result, Spain handled 1.04 billion mt-km of air freight in 2015. In addition, the country has 10 heliports, making air travel and freight delivery a relatively simple matter.
Spain also has highly developed rail and roadway systems. Spain ranks number 10 in the world for most miles of paved roadway and also has 1,000 km of inland waterways. The country’s rail system is robust at more than 15,300 km of track. Regardless of your need to ship by air, water, road or rail, Spain’s infrastructure can support it, so it’s easy to make decisions that meet both cost and speed criteria.
Spain’s unemployment rate is high at 17.2% as of 2017, but that is down from a high of 26% in 2013. The workforce is well educated, with a literacy rate of 98.3% of the population.
Agriculture employs 4.2% of the workforce, services 71.7% and industry employs the remaining 24%. The workforce totals 22.75 million people as of 2017.
Spain ranks number 53 in the world for geographic area, but it has the 28th largest population and the 15th largest GDP at $1.314 trillion. Spain joined the EU in 1986, and is the fourth largest EU economy.
From 2008 to 2013, the country suffered from a prolonged economic contraction that followed the global economic crisis. Strong growth in exports helped the country recover.
In 2017, Spain exported about $313.7 billion worth of goods. Primary trading partners included France, Germany, Italy, Portugal, the U.K. and the U.S. Spain’s primary exports include machinery, motor vehicles, food, pharmaceuticals and consumer goods.
Spain imported around $338.6 billion in 2017. The primary commodities included machinery and equipment, fuels, chemicals, semi-finished goods, food, consumer goods, measuring and medication control equipment. Primary import partners were Germany, France, China, Italy, Netherlands, and the U.K. It ranks 15th in the world for imports.
Taxes equal 37.9% percent of the GDP. It is relatively easy to file taxes in Spain, although it can take up to 184 hours per year. The time allotment is generally heaviest for employer-paid social security contributions, which may total 29.9% of gross salaries. Corporate income taxes equal 25% of profit. Other taxes may apply depending on the business type. There are also several additional miscellaneous taxes, including taxes on transportation, fuel usage and an environmental tax. Most taxes can be paid online.
Getting Down to Business
Doing business in Spain is exciting, challenging and potentially lucrative. Spain’s economy is currently on an upswing, and the high unemployment rate means it is easy to attract employees with sought-after skills and education. As a member of the EU, doing business in Spain is relatively easy, and its central location and well-developed infrastructure make it easy to import and export across Europe, Asia and the Americas.
There is a great deal of opportunity in Spain for setting up a new manufacturing business or globalizing an existing operation. QAD has the tools you need to jumpstart the process. QAD Production Orders allows simplified setup and operation of any type of manufacturing, and QAD Internationalization enables companies to identify and overcome the challenges associated with taxes, regulations and globalization.
How would you describe the state of Manufacturing in Spain? Learn more about manufacturing and doing business in other great countries around the world.