This is the time of year when the Foreign Investment Registry of the Ministry of Industry, Tourism and Trade publishes data on the stock of Foreign Direct Investment (FDI) in Spain and, in particular, in Madrid. This information Is based on the annual reports submitted by foreign investors operating in our country. In this latest update, the Registry provides details on the investment position and employment levels associated with the investments of the more than 19,600 foreign companies in Spain at the end of 2021. Once again, Madrid’s performance has been excellent.
New all-time high for investment stock in Madrid
The investment stock is an indicator of the sustained confidence of international investors in an economy and its companies. It represents the value of the assets that foreign investors own in companies in a certain location, with direct investment, and financing between related companies.
Since the lows of 2013, Madrid’s foreign investment position has experienced constant growth, reaching 363,063 million euros in 2021, considering only productive investments (that is, excluding the activities of holding companies). This figure is 4.3 per cent higher than the previous year and more than double (+130 per cent) the levels recorded in 2007, the first year for which the Registry provides data. The stock of productive FDI in Madrid represented 155% of regional GDP in 2021, equivalent to 53,777 euros per capita.
Madrid continued to lead the way in attracting foreign investment among Spanish regions. It accounted for 69% of the national total, 6 percentage points more than in 2007, well ahead of Catalonia (14%) and the Basque Country (3.8%).
To obtain a detailed analysis of the evolution of the fixed assets of these foreign companies in Madrid, which offers an alternative perspective to the investment position, we will have to wait for the publication of the Registry Position report during the summer, which will include data on fixed tangible assets. However, it is important to note that there has been significant growth in this type of asset in Madrid since 2013.
Seven years of continued growth in employment linked to FDI in Madrid
Madrid also leads the levels of employment linked to foreign investments in Spain. According to the Registry’s latest data, there were 569,948 workers in FDI related jobs in Madrid at the end of 2021. This represents an increase of 9% compared to the previous year, significantly outpacing the national growth, which was 3%.
Since the lows recorded in 2014, Madrid experienced sustained growth in this indicator for seven consecutive years. Despite the notable impact of the COVID-19 pandemic on 2020 data, employment in FDI related jobs in Madrid is currently 46% higher than in 2007, the first year for which there is data available.
In absolute terms, Madrid is home to the largest number of FDI related jobs in the country, with 32.3% of the total, followed by Catalonia (20.4%), Andalusia (9.0%) and the Valencian Community (7.0%). Madrid is also the leader in relative terms, with 18.2% of its active population employed in foreign capital companies, surpassing other regions such as Navarra (13.4%), Aragon (10.7%) and Catalonia (10.5%).
Ten countries, eight of them European, concentrate the highest levels of employment in foreign-funded companies
The top ten investor countries accounted for 86% of employment in foreign-funded companies in Madrid. France maintained the leading position, as has been the case since 2007, with 127,782 jobs, 22.4% of the total. The United States consolidated its second position with 107,294 jobs, 18.8% of the total, followed by Germany with 61,663 jobs (10.8%), the United Kingdom with 55,236 jobs (9.7%) and subsidiaries of Spanish companies abroad with 31,589 jobs (5.5%).
Next in the list of main investor countries in terms of employment generated in Madrid is Mexico (25,699 jobs), the Netherlands (21,653), Switzerland (20,191), Sweden (19,632) and Italy (18,540).
In 2021, the increases in employment in absolute values of companies from the United States, which added 31,085 jobs, with a strong increase in the Food Services sector, and France (+20,274 jobs, half of them in Call Center activities) were remarkable. Notable increases in employment were also recorded in companies from Italy (+3,135 jobs, many of them in Motor Vehicle Manufacturing), Mexico (+2,338) and Germany (+2,147). In contrast, the largest declines were observed in companies from Denmark, Luxembourg, China, Austria and the United Kingdom.
The Services sector, the largest employer in Madrid
Employment is also highly concentrated by sector. The Services sector represents 81% of employment in foreign capital companies in Madrid, followed by Industry (15%), Construction (3.1%) and Primary Sector (0.4%).
Five subsectors accounted for 65% of employment. Wholesale and retail trade was the subsector that reported the highest number of workers, bringing together 129,941 jobs, 22.8% of the total, with a preponderance of Retail trade. Wholesale and retail trade is followed by the Information and Communications sector, which added 72,524 jobs (12.7% of the total), of which the 51,183 jobs in Programming, consulting and other related activities were especially noteworthy. Administrative activities and auxiliary services accounted for 67,202 jobs (11.8% of the total), including Administrative activities, Employment-related activities and Security and investigation activities. The Manufacturing industry contributed 58,511 jobs (10.3% of the total), with four sectors above 5,000 jobs, among which Manufacture of other transport material and Manufacture of pharmaceutical products stood out. Hospitality, for its part, accounted for 43,514 jobs (7.6% of the total), mostly in Food and beverage services.