Spanish manufacturing in the wake of COVID-19
Fecha: julio 2020
Rafael Myro
Industria, Activos intangibles, COVID-19, Política industrial, Transición ecológica y digital
SEFO, Spanish and International Economic & Financial Outlook, V. 9 N.º 4
COVID-19 unleashed a massive shock on Spain’s industrial sector before it had achieved the production levels of 2008, prior to the Great Recession. The impact of the pandemic on the manufacturing sector is the result of a dual supply and demand shock. The direct contraction in the manufacturing industry’s GVA is estimated at 11.1%, solely due to transport and electrical equipment. This figure rises to 24.2% when the knock-on effect on the rest of the economy’s sectors is considered. Spanish manufacturers are particularly sensitive to foreign demand considering that 40% of their output is exported, which means the anticipated drop in world exports could have a major impact on industry. While data show that the competitiveness of the Spanish manufacturing industry is relatively strong, productivity is lower than that of Germany, Italy and France. This underperformance is attributable to human and technological capital, two factors which Spanish companies include on their balance sheets under intangible assets. These challenges could be more surmountable through the adoption of more robust technology and industrial policy coordinated by the Spanish government in concert with private industry.