The National Construction Federation (CNC) has warned that boosting public works projects will not be enough to solve the “real crisis” battering Spain’s construction sector.
“Public works alone will not compensate for the fall in the residential sector because public works are less labour intensive,” Juan Lazcano, president of the CNC, told Europa Press. He also pointed out that simply maintaining current levels of investment in public infrastructure will require an additional 5 to 6 billion Euros to compensate for the fall in EU funded projects.
According to the CNC, public infrastructure projects account for 25% of total construction activity, compared to 75% for the residential sector. In total, the construction sector contributes 18% of Spanish GDP, and employs 2.7 million workers.
The CNC forecasts that the present “sharp slowdown” in construction will last 2 to 3 years, “even if the financial situation improves and measures are taken.” Negative growth is expected for the sector in 2008, compared to positive growth of 4% in 2007.