The suspension of public procurement and restrictions on mobility to face the health crisis have had a negative impact on activity in the construction sector in 2020.
The tender was reduced by 25%; the contracting of works fell by 40.3%; Traffic on state and regional highways and highways, managed by companies, fell by 37% and 35%, respectively, and during the first state of alarm, an average of 80,200 jobs were destroyed per month, although they were recovered in practice totality at the end of the year.
These are data from Seopan, the sector’s employer’s association, which also regrets that the activity during the past year continued to drag two important inefficiencies. The first, related to the budget execution of the two major investment ministries (Transport, Mobility and Urban Agenda, and Ecological Transition and Demographic Challenge), since it did not exceed 68.7%.
The civil works tender was reduced by 25% during the past fiscal year
The second, the political indecision to solve the regulatory obstacles that prevent the raising of capital to finance the projects that the country needs to solve the deficit in priority infrastructures and comply with the United Nations Sustainable Development Goals. In 2020, the value of infrastructure concessions barely reached 50 million euros.
The pandemic has worsened the situation in the sector, which now relies on public investment plans in which several countries are working.
“Right now, as major potential markets, I would highlight, on the one hand, the United States. You just have to look at the infrastructure program of the Biden Administration, endowed with more than two trillion dollars. And, on the other hand, there will continue to be very good opportunities in Latin America because, even with the pandemic, there are projects of national interest in the making that will continue, “he highlights. Adolfo Pérez de Albéniz, Executive Vice President of Intecsa-Inarsa.
Spanish engineering has just landed in El Salvador, where it has won two contracts, one to lay the foundations for the future mass public transport system that will be launched in the east-west corridor of the metropolitan area of the capital, San Salvador, and another to improve road access to the beaches of the country’s Pacific coast.
Impact by companies
However, the impact of the health crisis has not been the same in all companies. In the case of Sacyr, “it has been very limited. It affected some multi-service activity and the works on a specific basis, but we are already conducting our business normally ”, says the construction company. 81% of its activity is outside of Spain.
1%-2,7% is the fork in the
which places Seopan potential growth
of the sector in 2021.
50 million euros it is
the value reached by
the 2020 infrastructure concessions.
34,490 million euros is the volume of aid
Europeans for this year.
71% of companies The sector claims to have suffered from the decline in public bidding, according to KPMG.
For its part, ACS revenues in 2020 reached 34,937 million euros, a reduction of 10.5%. With a highly diversified international business, the United States, with 17,300 million euros, represents 52% of its total business in the world. In North America, ACS is a reference, with a presence in almost all the states, “which gives us a relevant competitive position to face the expansion and development plans of infrastructures that the federal government plans to promote,” Florentino Pérez said in the last general meeting of shareholders recently held by the group.
In the case of Ferrovial, procurement activities have not been significantly altered either. Revenues from the construction business grew by 11.4% in 2020, reaching 5,862 million euros, thanks to the boost from projects in the United States. 87% of the turnover corresponded to international activity.
FCC’s turnover in Spain increased by 27.6% in 2020, to 848.8 million euros. “This is due to the good rhythm maintained in the development of projects, the most relevant being the remodeling of the Santiago Bernabéu football stadium, as well as other minor ones recently awarded,” says the company. In Europe and other markets, the business increased by 24.5%, to 390 million euros.
Globalvia, which since the beginning of the pandemic has focused on keeping all the infrastructures it manages in the world operational, considers that the post-Covid era will bring us a new reality that is not yet defined: “In the field of transport there is more uncertainty about how the new mobility patterns of users will be ”, highlights the transport infrastructure manager. And he adds: “Our interest continues to be in the OECD countries and always with a long-term investment focus through public-private partnerships.”
71% of companies in the sector claim to have suffered from the decline in public bidding, according to KPMG. “After a complex year, it is necessary to adapt the business plans to a more digital and sustainable context. Infrastructure companies are aware of the paradigm shift and prioritize these aspects ”, observes Ovidio Turrado, partner in charge of infrastructures at the consultancy.
The sector will grow between 1% and 2.7% in 2021, according to Seopan, although the prospects are “uncertain”, since they will depend on budget execution and the ability to manage European aid on time (34,490 million euros in 2021) of the recovery plan Next Generation.
“Spanish companies have a very good outside image, of quality at reasonable prices, and we are supported by the assets raised in Spain in the last four decades. The problem is that, in recent years, the volume of contracting fell significantly, when a A healthy local market means a successful internationalization. Perhaps now, with the arrival of European funds, there will be more opportunities in Spain, but we must continue to look abroad, “says Pérez de Albéniz, from Intecsa-Inarsa.
ACS. The existing scenario allows us to be optimistic and trust that economic activity will return to pre-pandemic levels.
Ferrovial. The Horizon 24 Plan places the company’s priority focus on the promotion, construction and management of sustainable infrastructures.
Sacyr. The priority markets for this new cycle are those that now have the rating of home markets: Spain and Italy; Colombia and Chile, and the Anglo-Saxons.
FCC. In 2021 it will tackle international urban infrastructure projects: hospitals, subways, bridges, tunnels, high speed, sports infrastructures …
Globalvia. Public-private collaboration is a fundamental tool for investing in infrastructure.