Economical & financial strategy of the Spanish construction firms during the 2008-2012

Objectives: The evolution of profitability, solvency and productivity of small, medium and big companies in the construction sector in Spain during the period 2008-2012; a period where the economic and financial crisis have affected especially the real state sector, a sector that represented (before the crisis) 13 % of the Spanish GDP.

Method: To conduct this study, a quantitative analysis was conducted of 271 Spanish construction companies within 2008-2012. The sample was divided into two categories according to their level of income and the number of employees: small-medium and large companies. The sample was selected from the SABI database (Iberian Analysis system balances). It is a public data base in which the entire annual accounts of Spanish companies are available. For the sample, included were those companies that were considered SME and big are following UR rules; and have not been in bankruptcy during the same period.

Results: The results show that Spanish construction companies that have withstood the crisis period, are solvent with a liquidity ratio above 1,5. In addition, the payment and collection period was evenly matched. With regard to real guarantees, it was found that all of them are above the industry average. Appropriate profitability of the sample has also been demonstrated considering the return of investment (ROI) and return of equity (ROE) analysed in this period. These companies have maintained their annual turnover through a strategy of internationalization of operations combined with conservative management of assets. Finally, it has been proven that employee productivity is above the industry average in Spain.