Barcelona has been affected by the global downturn but the city’s vibrant business culture is starting to generate economic green shoots, says Joan Roca of Roca Junyent
‘We get a sense that there is now new activity beginning to happen. Clients are coming to us with more enquiries and in a more confident way – businesses seem ready to explore the opportunities that the economic crisis has presented.’
The Barcelona and Catalan economies are however clearly different to those seen in Madrid, for example, he notes. Consequently the impact of the downturn has been felt differently but the region’s ability to begin to recover is also different.
‘Madrid is undoubtedly now Spain’s finance centre but this means that the economy there has been much more exposed to the continuing global downturn in financial activity. The financial services, private equity and infrastructure deals that were previously a dominant feature there were a much less dominant aspect of the Barcelona economy.’
This helps explains why the city is now beginning to see a more localised economic turnaround, suggests Roca. Barcelona may be home to some of Spain’s biggest corporate entities, and savings banks, but the regional economy is still dominated by small and medium sized-businesses.
‘There is no doubt that the region was hit very hard but being a much more localised economy means that a recovery is not so dependent on the international markets. Businesses here have absorbed the pain and where possible adjusted the way they operate and a growing number are now contemplating new things once again.’
Spring 2010 is producing different sentiments to those experienced in spring 2009, says Roca. ‘There is much less of a feeling of despair. Certain sectors – real estate and tourism – continue to be depressed but the day to day Catalan economy appears to be coming back to life.’
Transactional markets notably are showing signs of stirring, he says. Deals sizes may no longer be measured in the hundreds of millions but transactions are being done. Clients want to explore new ideas and opportunities.
‘Many major businesses have gone through restructuring or refinancing programmes and we still see redundancies and insolvencies, but companies at least now know the extent of their liabilities and are adjusting their structures and strategies accordingly.’
The type of new work the firm is now seeing is more like that experienced in a less extreme economic environment, he says. Divestitures continue to be made but new buyers are looking to capitalise on attractive asset prices and more companies are beginning to re-emerge from insolvency proceedings – there is no longer an automatic presumption of liquidation.
The same cautious optimism is also being seen in a more pragmatic approach to the region as a business centre, says Roca. An enforced period of relative austerity has refocused the region’s priorities.
‘ Some of the more extreme rhetoric, demanding greater autonomy and Catalan self-government, has been reduced as the regional governments have seen the need to focus primarily on fixing the economy.’
The economic dominance of SMEs meant that commercial leaders were very directly affected by the downturn but the same autonomy meant that businesses were also much more able to react quickly, and have begun to bounce back, he says.
In addition, investment continues to be made in the infrastructure of Barcelona and the surrounding area with a focus on promoting the region as an international design, technology and research and development centre. The result, he says, is that some of the negative sentiment questioning Barcelona’s place in the Spanish, and European, economies that was evident before the onset of the financial crisis has begun to fade. Like elsewhere in the world, a demand for change has brought about new economic and political leadership.
‘I believe that more always needs to be done in terms of greater promotion and investment in the city, to continue to focus on evolving the economy and its international attraction, but we are now in a much better place than we were. We are far from being where we want to be but I am now much more optimistic about the region and the economic outlook.’