Public works in Spain plummeted 32% at the end of March, at the start of the crisis

Between January and March, projects totaling an investment of 3,436 million euros were put out to tender.

View of a completely empty road in Zaragoza in full state of alarm.

The bidding of works by the different administrations Public companies registered a decrease of 32.3% in the first quarter of the year, just at the beginning of the health crisis that broke out in mid-March, when the state of alarm was decreed in the country, with the consequent paralysis and postponement of administrative processes.

Between January and March, projects totaling an investment of 3,436 million euros were put out to tender, which implies a cut of about 1,640 million in relation to a year before, according to data from the employers’ association of large construction companies and Seopan concessionaires.

The association publishes its monthly statistics coinciding with the announcement by the Minister of Transportation, Jose Luis Abalos, by which it intends that the construction sector, both public works and housing development, become a lever for reactivating the economy.

However, at the end of the first quarter of the year, public works broke the growth trend it had been registering, since at the end of 2019 it chained three consecutive years on the rise and marked a maximum since 2010 with a volume of 18,544 million euros.

As for the beginning of 2020, the promotion of public works was fundamentally weighed down by the decreases in those that are the responsibility of the Local administration and the central government.

State Ports

In the case of Ministry of Transport, the main investment body of the central Administration, the bidding for works was reduced by half, fell by 53.5%, in the first three months of the year, when projects were launched for 762.28 million.

The reduction derives from the collapse of 70% that showed the promotion of railway works, especially AVE, which accounted for 249 million, compared to 837 million a year earlier. However, road projects were also reduced by 36%.

The works in ports and airports, which are carried out by State Ports and Aena, and do not depend on the Budgets, could not balance these falls. The port ones accounted for 148 million, an amount 6% higher than last year, and those for aerodromes fell by 35%, to 99 million.

Municipalities and CCAA

On their side, the local administrations (municipalities, provincial councils and councils) put out to tender works for a total amount of 1,095 million between January and March, 38.6% less.

On the other hand, jobs dependent on regional governments ended the first three months with a slight decrease, of 2.2%, to total 1,446 million, despite the boost given to works in the Madrid’s community.

The approval of the Decree that declares the state of alarm in the country on March 14 left all administrative procedures on hold, including the bidding and resolution of public works tenders. In the cases in which this period coincided with the presentation of offers, these were postponed until the end of the alarm, with the consequent delay in their adjudication.