This chapter provides an overview of the Spanish economy and an in-depth review of non‑financial companies’ demographics, capital structure, investment levels and performance. It also provides comparisons with selected peer countries.
OECD Capital Market Review of Spain 2024
Capital Markets for a Vibrant and Sustainable Spanish Economy and Corporate Sector
Abstract
The Spanish economy was heavily impacted by the 2008 financial crisis and subsequent European sovereign debt crisis. Real GDP contracted in four out of five years between 2009 and 2013. However, economic activity began to pick up again in 2014, with real GDP growth averaging 2.6% up until 2019, higher than the EU average. Unemployment decreased by more than 10 percentage points, while the fiscal deficit, which stood at 11.6% of GDP in 2012, declined significantly to 3.1% in 2019. Investment, measured as gross fixed capital formation, also improved. Additionally, the banking system, which had been at the core of the earlier crises, strengthened substantially, with the share of non-performing loans falling from 7.1% in 2013 to 3.2% in 2019.
In 2020, following the onset of the COVID-19 pandemic, the Spanish economy again suffered greatly. The economic consequences were more pronounced in Spain than in many other European countries due to its heavy reliance on tourism, the significant role of small and medium-sized enterprises (SMEs), and a high prevalence of temporary employment contracts. As a result, in 2020 the economy contracted by 11.2% in real terms. However, it rebounded rapidly in 2021 and 2022, expanding by respectively 6.4% and 5.8%, faster than the euro area aggregate. This is partly a reflection of the government’s efficient handling of the pandemic. For instance, besides allocating additional resources to the health system, liquidity support was provided to households and small businesses by expanding short-time work schemes and offering public loan guarantees that particularly targeted SMEs and the self-employed. As a result, per capita income levels increased and unemployment fell (Table 2.1).
In 2023, GDP grew by 2.5%. It is anticipated that this will moderate further in 2024, with growth projected at 1.8%, picking up to 2% in 2025 on the back of private consumption, a strong labour market and assumed growth in export trading partners. Investment is expected be weak in 2024 but will pick up somewhat in 2025 off the back of implementation of the Recovery, Transformation and Resilience Plan (OECD, 2024[1]).
Source: OECD Economic Outlook 115, IMF, Eurostat, World Bank.
Real GDP growth in Spain has been characterised by more pronounced downturns than the EU aggregate during the European sovereign debt crisis and the COVID‑19 pandemic (Figure 2.1, Panel A). Given this, GDP per capita in Spain has decreased as a share of the EU27 over time and stood at 88% in 2023 (Panel B). However, real GDP grew by 2.5% in 2023, significantly more than peers’ average growth of 0.4%.
Note: In Panel A, dashed lines are OECD forecasts.
Source: OECD Economic Outlook 115, Eurostat.
Unemployment rates in Spain have historically been one of the highest in the euro area. The 2008 global financial crisis led to a significant increase in unemployment, peaking at 26% in 2013 (Figure 2.2, Panel A). This sharp decline in employment during the years following the global financial crisis was partly the result of adjustments to lower labour demand resulting in a decrease in employment rather than a reduction in wages (Browne and Fernández, 2016[2]). In 2014, Spain began to see improvements in employment rates. However, despite the positive trend in the subsequent years, the unemployment rate remains higher than those of its European peers (Figure 2.2, Panel C). Because of the COVID-19 pandemic, unemployment increased in 2020 and 2021. Unemployment in 2023 remains double-digit and above that of EU peer countries. A particular concern relates to the high levels of youth unemployment, at 27% in 2022, and the quality of jobs available for young people. However, Spain’s 2021 labour market reform has helped to significantly reduce temporary employment (OECD, 2023[3]). Despite a relatively high unemployment rate, firms increasingly report having to face labour shortages during the last few years (Banco de España, 2024[4]). This data hints at issues such as skills and geographical mismatches.
Over the past decade, inflation rates in Spain have followed a similar trend to that of other European countries (Figure 2.2, Panel B). Between 2013 and 2019, inflation in the euro area remained low due to a combination of factors. These include the impact of the global financial crisis and the European sovereign debt crisis, which together with other structural trends such as globalisation and demographic changes put downward pressure on inflation (ECB, 2021[5]). The period of low inflation continued due to the economic shock caused by COVID-19, leading to a negative average headline inflation rate in 2020. However, headline inflation began to rise significantly in 2021, primarily driven by the rise in energy prices. Food, non‑energy industrial goods and services also contributed to rising inflation. Amid this inflationary environment, the subsequent conflict in Ukraine disrupted supply chains, further pushing up prices for energy and food (EPRS, 2022[6]). The government implemented a temporary cap on electricity prices in June 2022, which contributed to slowing energy prices (Corbeau, Farfan and Orozco, 2023[7]). Following its peak in October 2022, headline inflation in Spain began to decline, primarily due to the slowdown in energy prices (Figure 2.2, Panel D).
Note: In Panel D, food includes alcohol and tobacco, industrial goods refer to non-energy industrial goods.
Source: OECD Economic Outlook May 115, Eurostat.
Consumption has played a central role in driving Spain's GDP growth over the past two decades. From 2014 to 2023, the average share of consumption over the total GDP growth stood at 67%, a figure that was even higher during the preceding 10 years (between 2004 and 2013), at 114%. Additionally, gross fixed capital formation and inventories contributed by representing on average 27% and 6% of the total, respectively, between 2014 and 2023. Net exports’ contribution to overall GDP has been very small during the last decade, at an average share of 0.2%. Nonetheless, this figure is still higher than during the period between 2004-13 when the average net exports contribution was negative at -5.9%. The expansionary trend characterised by consumption-led growth during this period was also evident in many countries of the euro area as well as in other industrialised nations, often with consumption outpacing investment growth (ECB, 2018[8]).
Spain’s current account has registered a surplus since 2012 (Figure 2.3, Panel B). This positive trend represents a shift from the deficits of the previous decades and can be mainly attributed to the improvement in the balance of goods, the reduction of the primary income deficit and the increase in the surplus coming from services. Even in 2020, when tourism-related activities were severely impacted by lockdowns and other COVID-19 preventive measures, the service balance remained positive, reflecting the significant role of non-tourism service sectors in the country’s economy. In particular, services linked to knowledge, such as engineering, science, and consultancy, played a substantial role in driving non-tourism service revenues growth in recent years (CaixaBank Research, 2023[9]). In 2022, the substantial increase in energy prices led to a deterioration in the balance of goods, but this was offset by a robust recovery in the services sector, particularly in tourism-related activities (IMF, 2023[10]) which continued to show improvement throughout 2023.
Source: Instituto Nacional de Estadística (INE), Eurostat.
After the global financial crisis, investment in Spain experienced a decline mainly driven by household investment and to a lower extent by public investment. From 2013 to 2019, however, the country witnessed a positive trend, with business investment showing the most significant growth. During this period, the business sector’s contribution to GDP increased from 11.9% to 14.4% (Figure 2.4, Panel A) and the average annual figure up until 2022 (13.2%) surpassed that of the EU and peers such as Germany, the Netherlands and Italy (Panel B). However, non-financial corporate investment was also the most affected sector by COVID-19 and experienced a stronger contraction in Spain compared to other European countries. In particular, since the second quarter of 2021 investment by non-financial corporations has been declining as a share of GDP (Figure 2.4, Panel C). This was partly due to the spike in energy prices, which hit Spanish companies particularly hard. In the last quarter of 2023, the investment rate by non-financial corporations was still far from pre‑pandemic levels (22.5% compared to 27.2% in 2019). In the EIB’s (2024[11]) annual investment survey, Spanish firms cite uncertainty about the future and energy costs as the main long-term barriers to investment.
Since 2011, Spain has had on average the lowest level of research and development (R&D) investment measured as a share of GDP when compared to both selected European countries and the EU average. This difference can be mainly explained by the contribution of the business sector which, for over a decade, has represented less than two thirds of the EU average (Figure 2.4, Panel D). The European Innovation Scoreboard also recognises the low level of R&D expenditure in the business sector as one of Spain’s relative weaknesses, together with low government support for business R&D (European Commission, 2023[12]). Besides structural factors such as the high seasonality of the labour market in Spain and the lower level of skilled professionals compared to other European countries, the lack of investment in R&D in Spain can be also partly attributed to the importance of SMEs in the economy. These types of enterprises usually face more difficulties to access the necessary financing to cover the fixed costs associated with R&D investments. Therefore, their capacity to grow and increase productivity remains constrained. In that context, incentivising the use of capital markets and decreasing the dependency on bank financing should benefit SMEs and increase their investment in innovation (BBVA Research, 2021[13]).
Note: In Panel B, gross fixed capital formation consists of resident producers' acquisitions, less disposals of fixed assets plus certain additions to the value of non-produced assets realised by productive activity, such as improvements to land. In Panel C the gross investment rate of non‑financial corporations is defined as gross fixed capital formation divided by gross value added. Data for France Q4-2023 is not available. Panel D shows gross domestic expenditure on R&D.
Source: Eurostat, World Bank.
Labour productivity in Spain, as measured by GDP per hour worked, lags significantly behind peer economies. The period that followed the global financial crisis, between 2009 and 2013, witnessed a counter-cyclical pattern in Spain's labour productivity. This phenomenon was driven by a substantial reduction in employment, particularly affecting less productive occupations. Moreover, the increase in unemployment not only decreased the total hours worked but also contributed to an increase in the capital‑labour ratio (IMF, 2023[14]). However, between 2014 and 2021 the growth rate of labour productivity decelerated (Figure 2.5, Panel A), preventing the country from closing the gap with peer economies. In 2023, Spain’s GDP per hour worked was 73% of Sweden’s, the country exhibiting the highest productivity among those considered for comparison (Figure 2.5, Panel C). This lack of convergence can be attributed to the low importance of relatively highly productive economic sectors in the Spanish economy and to the labour force's insufficient skill levels, which make it difficult to take full advantage of technological improvement (Banco de España, 2020[15]; Banco de España, 2021[16]).
Between 2008 and 2016, unit labour costs declined while labour productivity grew, indicating an increase in Spain’s competitiveness. However, since 2017, unit labour costs have shown an upward trend (Figure 2.5, Panel B). It is also worth noting that the proportion of wages and salaries to GDP have remained relatively stable throughout the period analysed, and even though it increased slightly between 2018 and 2020, the upward trend was not sustained. Wages increased only modestly during the inflationary spike of recent years, partly because of the historically low share of workers covered by collective agreements that include inflation indexation. Since 2023, regulatory changes also contributed to an increase in non-wage labour costs such as social security contribution (Hernández de Cos, 2024[17]).
Note: For Panel A labour productivity refers to GDP per hour worked. Data is only available until 2022 for Panel B.
Source: OECD Productivity Statistics, OECD Stat Database.
The years preceding the global financial crisis saw a marked expansion in private sector indebtedness in Spain. Amid a period of economic expansion, demand for housing increased sharply and banks increased their exposure to the real estate sector (FSB, 2011[18]). After the global financial crisis and the subsequent European sovereign debt crisis, there was a contraction in the real state sector. As housing prices began to decline, the ratio of non-performing loans (NPLs) as a share of total loans in Spain increased substantially and reached a level much higher than in many other European countries, such as Germany, France or Sweden (Figure 2.6, Panel B). Spain implemented several measures and regulatory changes aimed at supporting the liquidity of financial institutions as well as strengthening and restructuring the financial sector, which resulted in a deleveraging of the private sector (BdE, 2017[19]). Moreover, the country was also successful in reducing the ratio of NPLs due to both a favourable macroeconomic environment and the supervisory measures oriented towards encouraging prompt management by banks of troubled loan portfolios (BdE, 2020[20]).
In 2020, Spanish banks’ credit to the private sector increased, from representing 95% of GDP in 2019 to 109% in 2020 (Figure 2.6, Panel A). The NPL ratio, however, remained below pre-pandemic levels due to the measures taken to mitigate the impact of the crisis and sustain economic activity. These measures included: an extension of government guarantees up to EUR 100 billion for firms and self-employed individuals; the launch of a new line of guarantees to promote investment activities; the creation of a state rescue fund to support strategic business; and a capitalisation fund for medium-sized companies (IMF, 2022[21]). Bank lending started decreasing again in 2021, with banks tightening credit standards and facing a weaker demand for loans in 2023. Higher interest rates have contributed positively to the profitability of the banking sector but may harm borrowers’ repayment capacity (European Commission, 2023[22]).
Note: For Panel A, data for Germany is not available for 2023. For Panel B data for Sweden is only available from 2016 and data from Germany is only available until 2019.
Source: World Bank.
Recent economic shocks such as the global financial crisis and the COVID-19 pandemic have also had a significant impact on public finances in Europe. One of the main consequences of the global financial crisis and the subsequent European sovereign debt crisis was the substantial increase in the ratio of government debt, which in Spain in 2014 accounted for 105% of its GDP, above the EU average of 87% (Figure 2.7, Panel B). Moreover, the Spanish fiscal deficit increased markedly and reached the highest level among European peers (Figure 2.7, Panel A). In this context, the implementation of fiscal consolidation measures and the economic growth experienced during the years following the global financial crisis enabled the country to contain the rise in the debt-to-GDP ratio and reduce the government deficit (European Council, 2019[23]).
However, the response to the COVID-19 crisis resulted in the debt-to-GDP ratio rising again, reaching 120% of GDP in 2020 (Figure 2.7, Panel B). Government expenditure substantially increased to support the sectors most affected by the pandemic. Combined with a decline in tax revenues, this resulted in a marked expansion of the fiscal deficit. In 2020, the fiscal deficit accounted for 10.2% of the country’s GDP, the highest share since 2012, however, in 2021 and 2022, it decreased to 6.7% and 4.7% of GDP, respectively, reaching 3.6% in 2023. In the next years, it is expected that the gradual decreasing trend will continue due to the implementation of various fiscal measures and the recovery of the Spanish economy. This is reflected in lower unemployment and therefore in an increase in direct tax revenues (Gobierno de España, 2023[24]). However, Spanish public finances are expected to face significant pressures from spending related to defence, climate change, demography, and compliance with the new European fiscal framework (ECB, 2024[25]) .
Source: OECD Economic Outlook 115, Eurostat, World Bank.
Regarding the cost of debt, during the European sovereign debt crisis that severely affected Europe, Spain experienced a significant increase in interest expenses. Expenditure in this category represented more than 10% of its revenues in 2013 and 2014 (Figure 2.7, Panel D). In the following years, interest expenses have continuously declined. Currently, despite the stricter monetary conditions and the existing high debt level exceeding 100% of the GDP, the proportion of interest expenses relative to revenues has remained contained. This is also reflected in the difference between the total fiscal balance and the primary fiscal balance (the fiscal balance excluding net interest payments on general government liabilities, i.e. interest payments minus interest receipts) (Figure 2.7, Panel C). This can be partially attributed to the fact that while interest expenses are influenced by both public debt levels and interest rates, they are also heavily dependent on the maturity structure of government debt (BdE, 2022[26]). Interest expenses have not increased substantially, and it is expected that future increases will be moderate because Spain issued longer-term debt during periods of low interest rates (CaixaBank Reseach, 2022[27]). In the period between 2024 and 2026, Spain faces the maturity of fixed-rate debt of around 27% of its GDP. Refinancing this debt at higher rates is expected to increase interest expenditures by around 0.5% of GDP (OECD, 2024[28]). While the fiscal balance and the primary fiscal balance as a percent of GDP have increased significantly since the COVID‑19 pandemic, the net interest payments on general government liabilities have remained relatively stable over the past decade.
Small and medium‑sized enterprises (SMEs) play a crucial role in the EU economy, representing more than 99% of non‑financial businesses. In Spain, more than 94% of SMEs are identified as micro-enterprises (employing fewer than 10 individuals) as of 2022. Small enterprises (10 to 49 employees) make up 5%, while medium enterprises (50 and 249 employees) constitute 0.7%. The remaining 0.1% are categorised as large enterprises. This is comparable to peer countries, with the exception of Germany, where the proportion of micro-enterprises is considerably lower at 83.6%, and the percentages of small and medium enterprises are higher, standing at 13.8% and 2.1%, respectively.
The size distribution of Spanish companies has remained stable over the past decade, with the proportions observed in 2012 being very similar to those of 2022. Despite the consistent distribution, the total number of firms has grown by 14.5%. This increase surpasses the figures of Italy and Sweden, where there has been a decline in the number of firms in the same period, as well as in France. Germany and the Netherlands have grown faster, with the latter experiencing the most significant rise in the number of non-financial businesses at 75.3% (Table 2.2).
The growth in the total number of Spanish non-financial firms reflects dynamism in the business environment and several major structural reforms in Spain over the last decade. Reforms include the 2022 Law on Business Growth, which reduces the financial and administrative barriers for firms, and the 2022 Start-up Law which provides incentives to facilitate the creation of innovative companies. In addition, the 2022 Insolvency Law reforms changed the framework for insolvency procedures and restructuring plans to favour out‑of‑court negotiations and quicker action in financial distress situations (OECD, 2023[3]).
Note: In accordance with the International Standard Industrial Classification of All Economic Activities (ISIC) Rev. 4, the total corresponds to the Business economy, except financial and insurance activities.
Source: OECD SDBS Structural Business Statistics.
SMEs employ 67% of the workforce in Spain, a higher share than most of its European peers, with the exception of Italy, where the figure is 75%. Notably, Spain and Italy stand out as the only countries among those considered in the analysis where micro‑enterprises employed the highest percentage of the workforce, with shares of 34% and 41%, respectively. In contrast, in the other countries, large enterprises accounted for the largest share of employment. In France, Sweden and Germany, over 40% of employees work in large enterprises, whereas in micro enterprises the percentage ranges between 18% and 27%. (Figure 2.8).
Note: The figure corresponds to the sector “Business economy, except financial and insurance activities” according to the International Standard Industrial Classification of All Economic Activities (ISIC) Rev. 4.
Source: OECD SDBS Structural Business Statistics.
Productivity levels and firm size are positively correlated across countries (Figure 2.9). For instance, Spanish micro‑enterprises’ labour productivity (measured by the annual value added per employee) is USD 42 000, only half compared to large firms’ USD 84 000. A similar pattern is visible in the other peer countries. However, across the different firm size categories, productivity levels tend to vary across countries. Notably, Spain has the lowest labour productivity in all four size categories. The productivity gap between Spain and its peers is particularly pronounced in micro‑enterprises, where Spanish firms’ labour productivity reaches only 67% of the average in its peer countries. For small, medium and large firms in Spain, labour productivity stands at 84%, 86% and 84%, respectively, of the peer country average.
Note: Labour productivity is measured as value added per person employed. The figures correspond to the sector “Business economy, except financial and insurance activities” according to the International Standard Industrial Classification of All Economic Activities (ISIC) Rev. 4.
Source: OECD SDBS Structural Business Statistics.
In Spain, the wholesale and retail trade sector employs the highest number of people. Twenty-six per cent of employment in micro-enterprises is within this sector. The industry sector ranked second in terms of employment, with greater relevance for medium and large enterprises, representing 23% and 18% of the workforce respectively in 2022. Conversely, only 7% of the micro‑enterprises’ employees worked in this sector. The manufacturing sector is the third most important in terms of employment in Spain (Figure 2.10).
Note: In accordance with the International Standard Industrial Classification of All Economic Activities (ISIC) Rev. 4, the total corresponds to the Business economy, except financial and insurance activities.
Source: OECD SDBS Structural Business Statistics.
When examining the labour productivity of the three industries that account for the highest share of employment in Spain, Figure 2.11 illustrates that for micro, small and medium-sized enterprises, the differences in labour productivity across industries are smaller than those for large enterprises. Large firms in manufacturing and, more significantly, the industry sector have substantially higher levels of productivity compared to those in wholesale and retail. This holds true for all the countries considered in the analysis. Dutch firms tend to exhibit the highest labour productivity for the four size categories, with large firms exhibiting productivity levels of USD 200 000 per person employed annually in the industry and manufacturing sectors. Conversely, among small firms, Spain presents the lowest levels of productivity in the wholesale and industry sectors with USD 66 000 and USD 74 000 per person employed, respectively. For large firms, Spain is also the lowest ranked in the wholesale sector with USD 66 000 per person employed. In the case of micro firms, Spain is the second lowest ranked country in the three industries, following Italy.
Note: Labour productivity is measured as value added per person employed. Sectors classification is in accordance with the International Standard Industrial Classification of All Economic Activities (ISIC) Rev. 4. Source: OECD SDBS Structural Business Statistics.
The OECD-ORBIS Corporate Finance dataset is built by using financial and ownership information from the ORBIS database. Using a combination of ownership and financial information, companies are organised into four categories: listed companies; large unlisted companies; small and mid‑sized companies that are part of a group; and independent small and mid‑sized companies. These categories and their financial information are used to prepare an analysis of the business dynamics in Spain as well as a comparison with selected peer countries. The analysis is limited to non‑financial companies with more than 10 employees. This is for two reasons: data coverage typically increases with firm size, which means that the coverage for smaller firms is less reliable, hampering comparability; and because the focus of this report is market‑based financing, which micro-firms are generally unlikely to use.
The OECD-ORBIS Corporate Finance dataset includes financial and ownership information for non‑financial companies between 2005 and 2022. To evaluate the representativeness of the data against official statistics, Table 2.3 compares the coverage of the Eurostat business statistics with the OECD‑ORBIS Corporate Finance dataset. The OECD-ORBIS Corporate Finance dataset generally has similar coverage as Eurostat for small firms and a higher coverage for medium and large firms. Moreover, the distribution of firms across different size groups is also similar for both datasets.
Large companies are defined as having 250 or more employees, medium-sized companies as having between 50 and 249 employees, and small companies as having less than 50 employees. In the case that employment figures are unavailable, companies are classified based on their asset size. The asset size thresholds used are: above EUR 20 million for large firms, between EUR 4 million and EUR 20 million for medium firms and less than EUR 4 million (but larger than EUR 350 000) for small firms.
Note Germany is excluded due to unavailability of 2022 Data in ORBIS.
Source: OECD-ORBIS Corporate Finance dataset and Eurostat; see Annex A A for details.
The company categories intend to account for differences in size, industry, listing status and ownership structure, all factors that can affect the ability of companies to access financing and therefore their investment.
2.3.1. Category 1: Listed companies
This category includes, on average, 153 non-financial listed corporations per year with median assets of around EUR 400 million. Being listed on a stock exchange requires certain transparency and disclosure standards, as well as other corporate governance practices, meaning listing status may have a strong impact on a corporation’s financing conditions. A listed company typically passes a certain threshold in terms of its formal and institutional structure, which may make outside investors more willing to provide funds and which facilitates access to a wider range of financing options. This category includes corporations that were listed on multilateral trading facilities (MTFs) such as BME Growth. As presented in Figure 2.12, in 2022, listed companies accounted for 15% of the employment in the economy and generated 21% of aggregate sales.
2.3.2. Category 2: Large unlisted companies
This category includes, on average, 2 531 non-financial corporations with assets larger than EUR 95 million (USD 100 million) in 2022 in real terms (Table 2.4). Their median asset size was EUR 188 million in 2022 (Table 2.4). Compared with publicly listed companies, less information is available for large unlisted companies, which is likely to reduce their available financing options and potentially result in less favourable financing conditions. However, companies in this category can generally be classified as professionally managed, formal companies. In 2022 large unlisted companies represented around 41% of total sales and 31% of employment in the Spanish economy (Figure 2.12).
2.3.3. Category 3: Small and mid-sized companies that are part of a group
This category includes all small and mid-sized enterprises controlled by a listed (Category 1) or a large unlisted corporation (Category 2). SMEs based in Spain but controlled by a non-Spanish company are also included in this category. Category 3 contains, on average, 15 050 companies per year with median assets of EUR 7.9 million (Table 2.4). Since the financial results of SMEs that are part of a group are consolidated into a parent company, unconsolidated accounts are used in the analysis to identify their own structure. In general, the information available for SMEs is relatively limited, but being part of a group can help them access improved financing conditions compared to independent SMEs.
2.3.4. Category 4: Independent small and mid-sized companies
The last category includes all SMEs identified to be controlled by individuals and those with no available ownership information. For this category, only unconsolidated accounts are available. The group of independent SMEs is the largest in terms of number of companies (an average of 124 480 companies per year), but the smallest in terms of size (median assets of around EUR 1.2 million) (Table 2.4). The information available for these companies is limited and unlike SMEs that are part of a group, independent SMEs do not benefit from the financing advantages related to a group structure. As of end-2022, independent SMEs made up 31% of the total employment in the economy, but only 19% of total sales (Figure 2.12).
Table 2.4 shows the distribution of these four categories of non-financial companies in Spain with respect to their number and their median assets.
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
Note: For each category, sales and employment numbers are presented as shares of economy totals. Calculations for the total economy take into account the group structure of companies and avoid considering companies that are already consolidated in the accounts of domestic non‑financial parent companies. The figure does not show the category SMEs part of a group as these companies are accounted for in the financial statements of their parent company. The categories in this figure are subsamples of the economy constructed for characterisation and comparison purposes and do not consider parent companies with less than EUR 95 (USD 100) million in assets. As a result, they do not add up to 100%.
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
The growth of the Spanish corporate sector has been limited over the last decade with respect to both the number of companies and their median asset size. Figure 2.13 below illustrates the changes in the number of companies and their median asset size for each category in 2012 and 2022, where 2012 is indexed to a baseline value of 100. Only the number of listed companies has increased, with this growth being just 10%. SMEs that are part of a group have witnessed the most significant reduction in terms of number, followed by large unlisted companies and independent SMEs. The evolution in terms of median asset size has generally been stable. In the case of listed companies, despite the growth in the overall number, the median asset size has decreased since 2012. Similarly, it has also decreased for independent SMEs. Both large unlisted companies and SMEs that are part of a group have seen a modest increase in their median asset size.
The contraction seen in the Spanish corporate sector is mostly the result of the COVID-19 crisis. Between 2019 and 2022 the total number of firms decreased substantially (Table 2.4). Among all the categories, SMEs that are part of a group decreased the most (34%). For large unlisted firms and independent SMEs, the decrease in the number of companies was also notable standing at 28% in both cases. Listed firms were the least impacted in this regard and the number of firms belonging to this category only decreased by 4%.
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
As previously discussed, the corporate sector in Spain was highly impacted by the global financial crisis and the subsequent European debt crisis. Aggregate sales decreased substantially in 2009, dropping by 14%. Furthermore, both the aggregate profit margin and aggregate return on equity (ROE) reached their lowest point over the period analysed in 2012, standing at -0.3% and -0.01%, respectively. Following a gradual recovery, the overall Spanish corporate sector suffered another notable downturn in 2020 due to the impact of the COVID-19 pandemic. During that year, profit margins declined significantly from 4.1% to 1.3%, aggregate sales contracted by 13.9%, and aggregate ROE dropped from 7.9% to 2.2%, the lowest level since 2012 (Figure 2.14, Panels A and B). Following the crises, the performance gap in terms of return on assets (ROA) widened between firms in 2012. In contrast, the evolution of ROE has shown a parallel trend among companies at different points in the performance distribution (Figure 2.14, Panel C and D).
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
Following the improvements in performance observed in Spain, the share of loss-making companies (the share of firms with negative net income in the total number of firms) has decreased for all categories compared to 2012. In line with this development, the median ROE has improved. Generally, the lower the share of loss‑making companies, the higher the median ROE. Whereas in 2012 median ROE ranged between 2.3% and 5%, depending on the type of company, in 2022 it stood between 6.9% and 10.1%. Independent SMEs have seen the largest increase in financial performance over time, which has also been coupled with a significant reduction in the proportion of loss-making companies (from 42% in 2012 to just 17% in 2022) (Figure 2.15). One factor behind the decline in loss-making companies is the reduction in the number of companies in the group of large unlisted companies and both categories of SMEs.
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
Although the share of loss-making firms has decreased over time across all industries, the extent of this decline varies significantly between industries. As seen in Figure 2.16, in 2012, 61% of firms in the construction industry incurred losses. The global financial crisis had a severe impact on construction activities due to a significant contraction in the real estate sector in Spain. However, this share decreased gradually. In 2017 and 2022, the share of loss-making construction companies stood at 37% and 24%, respectively. In 2022, the real estate sector exhibited the highest share of loss-making companies (29%) followed closely by the mining industry at 26%. Conversely, the wholesale trade consistently displayed the lowest percentage of loss-making companies over the three years included in the analysis.
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
When examining performance levels over the last decade, Spain exhibited one of the lowest levels when compared to peer countries over time. In 2012, the performance of Spanish companies (measured by both ROA and ROE) ranked last. Over the years Spanish companies’ financial performance improved and in 2022 was higher than that of French firms.
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
Since 2009, leverage, measured as the ratio of financial debt to total assets, of Spanish firms has been declining, (Figure 2.18, Panel A). The reduction observed in 2021 was primarily driven by firms positioned at the upper end of the distribution, that is, those with higher indebtedness, experiencing a more significant decrease in leverage levels compared to firms at lower percentiles of the distribution (Figure 2.18, Panel B). Notably, 2020 stands out as an exception to the decreasing trend, an effect of the COVID-19 pandemic. During that year, the departure from the overall decline can be attributed to a rise in long-term debt among Spanish non-financial corporations, which increased from 22.9% to 25.1%. Spanish firms, in line with global developments, took advantage of an increase in the availability of long-term funding in 2020.
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
Spanish firms have higher levels of long-term debt compared to their European peers (Figure 2.19, Panel B). The disparity with other countries was particularly notable in 2012, when long‑term debt reached 28.4% of total assets. Despite showing the highest level of long-term debt, Spanish companies reduced their long-term debt levels between 2017 and 2022. The reduction in long-term debt levels has been accompanied by a decrease in short-term debt levels. The proportion of short-term debt relative to total assets has gradually declined from 7% in 2012 to 3.9% in 2022. Among peer countries, only Dutch companies had a smaller share of short-term debt in 2022, which stood at 1.8% of total assets. In contrast, Italy exhibited the highest ratios of this type of debt over time.
Consequently, capitalisation levels have increased more in Spain than in peer countries. In 2012, the capitalisation ratio, represented as equity over total assets, was 30.9%, the second lowest after Italy. However, by 2022, Spanish firms were in a better position, exhibiting a level of equity over total assets of 36.7%. Only Dutch and Swedish firms showed higher capitalisation ratios, reaching 37.4% and 40.2%, respectively (Figure 2.19, Panel C). The share of current liabilities over total liabilities for Spanish companies has remained stable over the last decade, showing a slight decrease from 32.1% in 2012 to 30.7% in 2022. Compared to other peer countries, the share of current liabilities in Dutch, Swedish and German non-financial corporations is in line with that of Spanish companies. In the case of Italian and French companies, current liabilities represent a higher percentage of the total with shares close to 40% in both countries.
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
When examining the debt levels across company categories, the evolution of total debt has followed a similar pattern for all four categories. Specifically, in 2010, all companies exhibited debt levels surpassing 30% of total assets. Subsequently, there was a declining trend until 2017, at which point the debt levels generally stabilised. In 2020, there was a resurgence, predominantly in long-term debt, although total debt remained below 30% for all firm categories except for SMEs that are part of a group. Besides the similar trend observed, there are also some differences among company categories. In 2010, both listed companies and large listed companies started with higher levels of debt compared to the other two categories, with shares of 35% and 34%, respectively. However, these firms are the ones that experienced the most significant reduction in debt levels in the subsequent years, especially large unlisted companies, which since 2016 have had the lowest levels of total debt. There are also important differences in the maturity composition of their debt. While short-term debt consistently remained below 10% across all firm categories, both categories of SMEs, particularly independent SMEs, tended to have higher levels of short-term debt, indicating greater vulnerability to economic shocks. Moreover, for independent SMEs, short-term debt has not followed the decreasing trend observed in the other company categories (Figure 2.20).
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
The decrease in leverage in Spain holds across indicators. One other commonly used measure is the debt-to-EBITDA ratio (total debt over earnings before interest, taxes, depreciation and amortisation), which measures a company’s ability to service its debt by using its generated profits. A ratio over 4 is sometimes considered to put a company in a higher risk category (S&P Global, 2024[29]). On aggregate there has been a modest reduction in the share of companies with a high debt-to-EBITDA ratio (>4) since 2012 (Figure 2.21, Panel A). At the same time, the share of firms with negative EBITDA decreased substantially. Although the share of companies with high debt-to-EBITDA ratios increased slightly from 33.7% to 35.8% in 2020, due to higher debt levels and lower corporate profits, it decreased again in 2021, resuming the declining trend observed before the COVID-19 crisis.
Analysing this indicator by company type, listed companies experienced the largest fluctuations over time (Figure 2.21, Panel B). Between 2015 and 2019 the share of listed companies with high debt-to-EBITDA ratios decreased notably from 50% to 32%. In the same period, the changes for large unlisted companies, SMEs within a group, and independent SMEs were significantly lower than that of listed companies, decreasing between 2.4 and 4.8 percentage points. Moreover, in 2020, listed companies also experienced a pronounced increase in the proportion of firms with a debt‑to‑EBITDA ratio greater than 4, rising from 32% to 48%. In 2020, independent SMEs also witnessed a slight raise in the share of companies with a high debt ratio.
Source: OECD-ORBIS Corporate Finance dataset; see Annex A for details.
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