Is Spain becoming a key market for the machinery industry?

Spain's economy is increasingly becoming a model nation within the EU. In its latest "Economic Outlook" from September 2025, the OECD reports a solid GDP growth of 2.6 percent in real terms for the Iberian country this year and two percent for 2026, after already recording a 3.2 percent increase in 2024. Figures that many European countries can only dream of. The EU Commission estimates the EU average GDP growth at around 1.1 percent in 2025, and for Germany its leading economic research institutes are only moderately optimistic in their current autumn report from the end of September, with a meager +0.2 percent this year and +1.3 percent in 2026.

"Growth in Spain is mainly driven by private consumption, which in turn is supported by significant net immigration (1.7 million people within four years), the boom in the tourism sector, and real income increases," emphasizes Friedrich Henle, correspondent for Germany Trade & Invest for Spain and Portugal. "Spanish companies are also currently very successful internationally, especially in non-tourism services (banking, engineering services, IT)," the GTAI expert further explains.

“The mood in the private sector is noticeably improving,” Henle continues. “In the past two years, equipment investments were rather subdued with only a 1.1 percent increase each. Now, however, companies are investing more to meet the rising demand. For the year 2025, the EU Commission expects a 5.5 percent increase in equipment investments.

The financial leeway for this has expanded - many companies were able to present pleasing annual results for the year 2024 with higher revenues and profits. An additional impetus comes from Brussels: The highest outflows from EU funding pots are expected in the years 2025 and 2026. Private sector players also benefit from corresponding tenders. The construction sector, like the overall economy, is also expected to grow by 2.6 percent in 2025.”

Mechanical engineering exports: Spain ranks among the top 10

According to GTAI, developments in individual industrial sectors vary: In the first half of 2025, there were significant production increases, particularly in the electronics and optics sectors (+4.2 percent), electrical machinery and equipment (+3.6 percent), and transport vehicles excluding motor vehicles (3.0 percent). Significant declines were recorded in the motor vehicle sector (-7.4 percent), the leather and shoe industry (-6.9 percent), and refineries (-6.8 percent).

For the German export economy, plagued by US tariffs and concerns about China, Spain currently also represents a bright spot, as exports to the Iberian country rose by 5.0 percent to 29.1 billion euros in the first half of the year, after goods worth around 54 billion euros could be delivered in both 2023 and 2024.

“Spain is now also among the top 10 export markets for German mechanical engineering companies,” emphasizes Yvonne Heidler, Western Europe/EU consultant at VDMA. “Compared to the 'top 3 export markets' USA, China, or France, there is still a significant gap, but Spain already reached rank 10 in German mechanical engineering foreign trade with German deliveries of 6.1 billion euros in 2024. Since the corona year 2020, German machinery exports to Spain have increased by 45 percent from 4.2 billion euros. In the first half of 2025, they increased by a further 3.5 percent to 3.1 billion euros compared to the same period of the previous year, according to data from the Federal Statistical Office and VDMA,” the VDMA expert further explains.”

German manufacturers were also able to increase their share of Spain's total machinery imports (23.6 billion euros in 2024) to 24.5 percent, significantly ahead of China (14.0 percent), Italy (13.9 percent), and France (8.5 percent), according to data from Eurostat and

VDMA. Spanish machinery exports reached an impressive 18.7 billion euros in 2024. However, German machinery imports from Spain (1.4 billion euros in 2024) fell by 5.4 percent compared to the previous year.

According to the VDMA, German machinery exports to Spain in 2024 mainly came from the sectors of materials handling technology, general air technology, agricultural technology, drive technology, power systems, food and packaging machines, and fittings.

Spain's mechanical engineering is highly internationalized

“Spain's mechanical engineering sector is highly internationalized,” adds GTAI expert Henle. “The export rate is particularly high at around 75 to 80 percent in machine tool manufacturing, which has its regional focus in the Basque Country. Under the umbrella association AFM, also based in the Basque Country, more than 200 members and partners of the Spanish machine tool industry are organized. In the Basque Country, the elevator manufacturer Orona (revenue > 1 billion euros) also has its headquarters, and the elevator company Otis has its main production in Spain.”

The Spanish mechanical engineering sector is also strong in the fields of renewable energies (for example, in wind turbines) and automotive supply. Additionally, the country benefits from its geographical location as a bridge to Latin America.

According to the European statistical office Eurostat (NACE code 28), production in the Spanish mechanical engineering sector increased by one percent in 2024 compared to the previous year. The GTAI emphasizes that there was significant growth in the production of refrigeration and air-conditioning products and food machinery. There were significant declines in the product groups of bearings, gears, gear wheels and drive elements, as well as pumps and compressors.

About five percent of the gross value added in Spain's manufacturing industry comes from mechanical engineering (in comparison: the automotive industry accounts for about nine percent), Henle further reports. "The mood is currently ambivalent: on one hand, domestic demand is good. On the other hand, international uncertainties are increasing. The USA is Spain's third most important export market after France and Germany. In 2024, Spanish mechanical engineers delivered products worth four billion euros there. No other sector in Spain achieves higher export figures to the USA."

Due to the higher US tariffs, Spanish medical technology and pharmaceutical producers also fear significant losses, adds the VDMA.

These companies are among the highest-grossing in Spain

The highest-grossing companies in Spain's mechanical engineering sector include the agricultural machinery manufacturer John Deere Ibérica, the previously mentioned specialists in elevators, escalators, and conveyor technology Otis and Orona, the power electronics specialist Power Electronics, the packaging specialist Ulma Packaging, and SKF Española.

In the field of CNC/machine tools, companies such as Nicolás Correa (producing high-quality CNC milling machines since 1947, among others, for the aerospace and energy sectors), Danobat (from the Basque Country, one of Europe's leading manufacturers of round, grinding, and turning machines), Zayer (specialized in complex milling tasks in the aerospace, automotive, and mold-making industries since 1968), and Soraluce (known for high-quality milling and drilling machines, increasingly with smart factory technologies) are worth mentioning.

Gestamp Automoción is a significant company

in the automotive supply sector, ITP Aero in aircraft engines, Sisteplant in the field of digitization/automation, Marine Navantia Shipyard for ship propulsion systems, and the company AUSA from Barcelona as a manufacturer of construction vehicles and lifting technology.

There are also market leaders in the renewable energy sector, such as the Iberdrola group, which is among the global leading energy providers with a worldwide installed renewable capacity of over 56,000 MW. By 2025, approximately 21.5 billion euros are to be invested in offshore wind, onshore wind, solar, and hydrogen. Together with the Norwegian state fund, the company plans to spend over 2 billion euros on Spanish and Portuguese solar projects.

Siemens Gamesa Renewable Energy, created by the merger between Gamesa and Siemens Wind Power in April 2017, is currently the second-largest wind turbine manufacturer worldwide with around 28,000 employees, according to its own statements. The company is headquartered in Zamudio, near Bilbao.

Acciona Energía, which is 100% specialized in renewable energies, also operates facilities for wind, solar, hydropower, biomass, and hydrogen. By the end of June 2025, 15.1 MW of capacity had already been installed. In 2023, the company achieved a turnover of 3.5 billion euros with over 3,100 employees.

The fourth-largest global provider in the wind energy sector is the Portuguese group EDP Renováveis (EDPR), headquartered in Madrid, with worldwide engagements including North and Latin America as well as Europe. In 2023, EDPR achieved a turnover of approximately 2 billion euros.

Solaria Energía y Medio Ambiente, a publicly traded company based in Madrid, specializes in the production of photovoltaic solar energy. By the end of 2023, 3.2 GW of solar plants were already in operation or under construction. The company has an order backlog of more than 14,200 MW, distributed across southern European countries, and aims to achieve an installed capacity of 18 GW by 2030.

Strong presence of German machinery manufacturers in Spain

German machinery manufacturers have a strong presence in Spain, especially in the regions of Catalonia (around Barcelona) and northern Spain. They benefit from Germany's high-quality image. German companies are particularly active in the segments of machine tool manufacturing, automation, robotics, intralogistics, and elevator technology - key areas where Spain is progressively digitizing and modernizing.

“Many of our member companies have been on-site for years,” explains VDMA expert Heidler, “such as ebm-papst, Festo, Krones, Liebherr, Mahr, Multivac, Samson, SEW-Eurodrive, Trumpf, or Voith, to name just a few.” “The strong presence of German companies in the Spanish industry, for example in the automotive, chemical/pharmaceutical, or electrical engineering sectors, also provides good connections for German machinery manufacturers,” adds Henle from GTAI.

Trend towards nearshoring to Spain continues

In addition to other major players, such as the Augsburg automation expert Kuka, which supplies more than 700 high-tech robots to the VW plant in Navarra in northern Spanish Pamplona for body construction, or the ThyssenKrupp Group, which is strongly represented in Barcelona in the fields of engineering, steel production, elevators, marine systems, and plant engineering, numerous hidden champions have often been present on site for decades.

For example, the specialist in industrial robotics, automation, positioning, and transport solutions, Tünkers Maschinenbau GmbH from Ratingen with its subsidiary Tünkers Ibérica in Barcelona or Loesche GmbH from Düsseldorf, which offers plant engineering for vertical roller mills, among others, for cement, minerals, and steel through its presence in Madrid.

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Since 1969, the Vulkan Group has been active in Spain in the fields of drive technology, elastic couplings, cardan shafts, brakes, climate/cooling technology through its subsidiary Vulkan Española S.A. in Madrid or Jungheinrich with its dense service network in Spain in the areas of intralogistics, forklifts, and warehouse technology; mechanical engineering solutions for material flow or the Wacker Neuson Group from Munich, which acquired the Spanish company Enarco S.A. in Zaragoza, a manufacturer of light construction machinery (e.g., compaction equipment), in 2022.

It is very likely that the trend towards nearshoring to Spain will continue, as the approximately 1,100 member companies of the AHK Spain, which has been represented locally since 1917, are also optimistic. In the spring 2025 edition of the “AHK Barometer Spain,” 95 percent of the surveyed German companies in Spain rated their current economic situation as positive - 59 percent described it as good and 36 percent as satisfactory.

The proportion of companies with a negative assessment has significantly decreased from 18 percent in autumn 2024 to only five percent. Forty percent of German companies in Spain want to increase their investments in the next twelve months - a clear increase compared to 24 percent in autumn and 25 percent in spring 2024.

Attractive EU funding pots open up good prospects

“The Spanish economy also receives important impulses from Brussels,” report Yvonne Heidler and Friedrich Henle. “Because significant funding from the “NextGenerationEU” fund is still available in the current financial period until the end of 2026. The Spanish mechanical engineering sector benefits directly from this, as well as indirectly through the demand from its customers in Spain.

Larger investment projects, which also provide impetus for mechanical engineering, mainly come from the construction sector. The number of building permits increased by 16 percent in 2024 compared to the previous year. Public tenders in residential construction increased by 45 percent. The construction association SEOPAN predicts a nominal sales growth of 3.5 percent for its industry.

In April 2025, the Spanish government launched a new €1.3 billion funding program for industrial residential construction, financed by the “NextGenerationEU Fund.”

“Large sums continue to flow into the expansion of transport infrastructure,” emphasize the two experts further. “Especially in the area of rail infrastructure. In the building sector, several international companies have announced plans to build large data centers in Spain. The Spanish construction group ACS alone plans to spend twelve billion euros over the next five to seven years for this purpose. In the energy sector, the expansion of renewables, as already mentioned above, is progressing rapidly. Numerous green hydrogen projects are in the starting blocks. The blackout on April 28, 2025, is likely to bring the importance of investments in grid expansion and battery storage into focus,” reports the VDMA further.

Automation and AI on the rise

Spain is making significant progress in connecting automation, AI, and sustainability in mechanical engineering through collaborations, innovative factory designs, and data-driven processes. Public funding programs and innovation clusters are driving the integration of digital technologies toward a green future. However, many SMEs still have a significant need to catch up. The automotive sector is particularly a pioneer in AI.

For example, in the Renault plant in Palencia, built in 1978, two hours north of Madrid, where Renault models Rafale, Espace, and Austral are produced, AI has long been established. Thanks to state-of-the-art technologies, such as 3D scanners or high-resolution AI cameras, errors are detected directly on the assembly line. Each car passes through 800 AI-monitored checkpoints during production before it rolls off the line. AI also controls the entire supply chain, detects production problems early, and can report material defects online via the cloud to Renault factories worldwide. The facilities thus produce at the highest quality level and are particularly environmentally and resource-friendly.

Strategic partners that jointly offer solutions for Industry 4.0 and digitalization include Telefónica (or the German subsidiary O2 Telefónica) and Siemens. In Germany, they are working together on integrated 5G network solutions based on network slicing for the water industry, while the cooperation in Spain focuses on industrial digitalization through the use of 5G, IoT, and AI in production processes aimed at energy and resource optimization.

The goal is a green, agile, and resilient mechanical engineering industry

A state-of-the-art factory in the Málaga TechPark is also being built by Airzone, a company specializing in climate control systems for buildings. With an investment of 19 million euros, the plant employs AI-driven logistics, digital twin, automated warehouses, and driverless vehicles. The facility is powered by a 400 kW photovoltaic system and receives BREEAM certification for sustainable construction. In addition to production, Airzone collaborates with the University of Málaga to develop solutions for energy-efficient building management using IoT, AI, and big data at the jointly established Center of Excellence.

For some time now, the industrial initiative Industria Conectada 4.0 (IC 4.0) of the Spanish Ministry of Economy has been promoting digital transformation at all levels - focusing on automation, digital processes, training, and a connected industrial platform. The aim of the initiative is to achieve higher quality output and strengthen export and innovation capabilities.

High-level industry meetings, such as the Industrial Congress 4.0 "Advanced Factories 2026" planned again at the Barcelona exhibition center from May 5 to 7, 2026, are intended - as the organizer emphasizes - to showcase the latest advancements and cutting-edge technologies from 570 leading companies that are transforming factories into digital and sustainable factories through the use of advanced and environmentally friendly technologies.

Additionally, Spanish companies and research institutions demonstrate how sustainability, automation, and AI can be linked with highly innovative technologies in mechanical engineering. For example, the Instituto Tecnológico de Informática (ITI) in Valencia is working on AI solutions for the entire lifecycle of mechanical engineering products in the EU-funded AIDEAS project with partners such as the Universitat Politècnica de València.

Design, production, use, maintenance, reuse, and recycling should be optimized. The goal is a green, agile, and resilient mechanical engineering industry. AI solutions from the project optimize component design, production planning, quality control, maintenance, and shorten life cycles through prescriptive maintenance and promotion of the circular economy.