War In Ukraine Hinders Growth For Foreign Investors In Spain


The war in Ukraine has affected the results and performance of foreign companies established in Spain, although without actually reversing the positive trend that these companies report in investment, turnover, export volume and job creation.

The 15th edition of the Barometer of the Business Climate in Spain presents foreign business investors’ perspectives on Spain. It was jointly carried out by the International Center for Competitiveness (ICC) of IESE – with Professor Pascual Berrone as director and Maria Luisa Blazquez as researcher and co-author of the report – together with ICEX-Invest in Spain and Multinacionales por marca España. The report finds that 75% of these foreign companies consider the war in Ukraine to have had a negative impact on their business in 2022. 50% said the impact was significant, and a mere 7% consider it to be negligible.

Many fingers point to increased energy costs as a main culprit (88% of managers surveyed). Additionally, 56% cite supply issues (which have been dragging on since the pandemic) and 41% have experienced problems with logistics and distribution.

Even so, 2022 closed with positive figures, and forecasts for 2023 suggest more of the same, albeit with continued uncertainty.

Perspectives on 2023

Investment figures for 2022 and projections for 2023 remain positive in general, though lower than in 2021. 84% of companies surveyed plan to increase or maintain their investments this year, compared with 88% in 2021. Only 21% believe the war has cost them clients.

Turnover is what is most affected by the instability. Though 83% of companies in Spain maintained or increased their turnover (one percentage point less than in 2021), this is expected to drop to 80% in 2023.

Employment is a sunnier prospect. Despite waves of layoffs worldwide, 91% of the companies surveyed anticipated maintaining or growing their workforce next year. However, a larger percentage than last year opted for the “maintain” option, and fewer companies are expecting to grow (from 47% in 2022 to 36% in 2023).

Why does Spain appeal to foreign investors?

Foreign investors gave Spain a rating of 2.9 out of 5 (similar to its scoring in previous reports), with particularly high marks going, as in the past, to infrastructure. Market size and human capital were also cited as reasons for choosing Spain. Costs, particularly of energy, were seen as a setback in this iteration of the study. As elsewhere, these higher prices are partly caused by the war in Ukraine.

Methodology, very briefly

The 15th edition of the Barometer of the Business Climate in Spain, prepared jointly by ICEX-Invest in Spain, Multinacionales por marca España and IESE’s International Center for Competitiveness, collects the opinions of 720 foreign companies on their economic activity in Spain in 2022.

IESE Insight

IESE Insight is produced by the IESE Business School, a top-ranked business school that is committed to the development of leaders who aspire to have a positive, deep and lasting impact on people, firms and society through their professionalism, integrity and spirit of service.

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