Catalonia, the third most important destination for British investment in Spain

Barcelona (CNA).- Catalonia has been the third territory of Spain in terms of volume of Foreign Direct Investment (FDI) from the United Kingdom since the beginning of the economic recovery, behind only Madrid and Basque Country. Between 2013 and the first half of 2016, Catalonia received a gross flow of €546 million, according to the Barometer on the Climate and Perspectives for British Investment in Spain and Catalonia, a report that analyses the evolution of direct investment from British companies in Spain. The Barometer, prepared by International Financial Analysts and released this Wednesday by the British Chamber of Commerce in Spain, highlights a change in the trend: while British FDI in Catalonia had been heading downwards since 2013, it has revived in 2016 and currently represents 4.4% of total investment in Spain. Ahead of Catalonia, Madrid and the Basque Country received, respectively, €3,258 and €828 million from the UK between 2013 and last June. 

The most recurring destinations for British investment in Catalonia are extractive industries (30.7%), the automotive sector (23.2%) and construction (14.8%). According to data from 2014, British investment accounts for the maintenance of 33,366 jobs in Catalonia, a figure equivalent to 0.9% of total employment in the region. Of those jobs, 19,317 were generated directly by British investment, while the remaining 14,049 are indirect.

During the presentation of the Barometer, the British ambassador in Spain, Simon Manley, highlighted the “impressive” magnitude of the figures, referring to the fact that British companies are the third-biggest investors in Spain. In relation to Catalonia, the ambassador praised the “384 Catalan affiliated companies in the UK” and on the ‘Brexit’ he recommended “ignoring speculation” before the invoking of article 50. “We can and must find a way to agree on a future relationship with the EU and its member states to protect our vibrant trade, human and political relations”, he added.  

In the same vein, the President of the British Chamber of Commerce in Spain, Christopher Dottie, labelled the British referendum outcome as “unwanted” by the organisation and stressed the necessity “to ensure maximum access to the common market and the stability of the more than 300,000 British residents in Spain” during the negotiations between the UK and the EU.  

For his part, the CEO of Banc Sabadell, Jaime Guardiola, said that the reaction of the British economy has so far been “better than expected” and asked the institutions of Spain to be “active players in trying to make negotiations between the United Kingdom and the EU the best possible”. The UK was the destination for the first office of Banc Sabadell abroad. Indeed, the entity acquired 100% of the British bank TSB, with 600 branches and four million customers, in August 2015. 

British investment in Spain

The UK is the third country in terms of investment in Spain, with €37.7 billion in 2014, an 11% rise in comparison to the previous year, which places the country ahead of France and just behind Italy and the US, second and first, respectively. 

In the whole of Spain, British investment generates more than 160,000 jobs through direct and indirect, which is mostly concentrated in the sectors of telecommunications (14.3 billion), tobacco (6.2 billion) and wholesale commerce (2.1 billion). Moreover, British FDI contributes €6.1 billion a year in public funds through taxes and contributions.

The data on the flow already available for the first half of 2016 indicates that neither the lack of government in Spain for 10 months nor the uncertainty of the ‘Brexit’ are significantly affecting British investment in Spain. Indeed, 64% of the UK companies surveyed by the British Chamber of Commerce in Spain said that they do not plan to modify their volume of investment committed for 2017.