OREANDA-NEWS. BMI View: In 2015, Spain's construction industry recovered after six years of consecutive decline. While maintain our positive outlook for the industry in 2016, persisting political uncertainty in Spain poses a significant downside risk to our forecasts. In the medium- to long term, growth in the construction industry will be held back by the country's structural economic weaknesses, constraints on government spending as well as negative public view on large-scale infrastructure projects, stemming from the pre-financial crisis years.

Latest Updates And Structural Trends

- In 2015, Spain's construction industry recorded growth for the first time since 2008. The total industry value rose by 5.2% y-o-y, reaching EUR54.3bn. We expect the construction industry to sustain positive growth rates, averaging 2.3% per annum across the coming decade. However, political uncertainty will weigh on investor interest over the short-term.

- Sustained investment in the rail sub-sector will account for the majority of public spending in Spain's transport infrastructure in 2016. Other areas of transport infrastructure are unlikely to receive as much investment as the government struggles with high fiscal deficits. In this context, EU funding will remain an important source of investment, particularly in the roads and bridges sub-sector.

- The Gipuzkoa provincial government in Spain approved legal changes to open a tender process for a waste-to-energy plant. The EUR200mn public-private partnership project, to be built at Zubieta, will include the construction, finance, operation and maintenance of the facility. The plant will have capacity to treat about 200,000 tonnes of waste annually. Construction is scheduled to begin in early 2017.