Report 'Business activity in Barcelona'

Report

Business

activity

in Barcelona

Barcelona, March 2014

Report Business activities in Barclona 2013 2

Index

01 EXECUTIVE SUMMARY .............................................................................................................................. 3

02 BUSINESS ACTIVITY IN BARCELONA 2013 ............................................................................................. 4

02.1 Company structure and demographics in Barcelona. ..................................................................... 4

02.2 Anàlisi by large sectors ................................................................................................................... 6

02.3 Analisy by areas of activity .............................................................................................................. 7

02.4 Development of trading companies in 2013 .................................................................................. 10


01 Executiu summary

• In January 2013 there were 169,777 companies and 192,642 business establishments in Barcelona, which is a slight decrease with respect to 2012 (1.2% and 0.9%, respectively). The relative reduction in the number of companies in Barcelona city is slightly less than it is for the province, Catalonia and Spain.

• Nearly 30% of companies in Catalonia have their head offices in Barcelona (29.2% of the total), while

Catalonia has nearly 1 out of every 5 companies (18.5%) in Spain.

• With respect to the previous year, the city has gained more than 2,900 new companies with employees

(4.1%) – the first positive result since 2009 – while the number of companies without any employees has decreased significantly (4.9%).

• In terms of business density, there are 105.3 companies for every 1,000 inhabitants in Barcelona, a

ratio that is much higher than those for the Province of Barcelona (79.1), Catalonia (76.9) and Spain (66.8).

• The main reasons why the number of businesses in the city has decreased by 9,500 companies since 2009 (5.3%) are the lack of demand and credit difficulties that the business world has encountered due to the crisis.

• In terms of large sectors, from January 2012 to January 2013, there was a slight increase in the number of

companies in the non-commercial sector (0.9%), while commerce lost businesses (3%). There was a more significant drop in industrial companies (6.2%) and in construction (9.4%).

• In Barcelona, the number of microbusinesses and companies with more than 200 employees rose

(5.1% and 8.8, respectively) compared with the previous year. In contrast, the companies suffering the biggest interannual decrease are those with 50 to 199 employees (5.7%), followed by those without employees (4.9%) and those with 10 to 49 employees (3.1%).

• There are 65,654 companies in knowledge-intensive sectors in the city, which represent 38.7% of the total number of companies in Barcelona. With respect to 2012, high-knowledge companies have experienced an increase of 1%, a favourable development which contrasts with the decrease in the total number of companies in the city (1.2%).

• In 2013, 7,067 trading companies were created in Barcelona, 334 more (5%) than in 2012. This means that the number of newly-created trading companies increased for the third year running and reached its highest level since 2008.

• Business services represent more than 15% of all new companies registered in Barcelona's Mercantile Registry in 2013 and, together with commerce (13.9%), they account for nearly 30% of the companies created.


02 Business activity in Barcelona 2013

For the fourth year running, Barcelona's business data comes from the Central Company Directory (DIRCE)1 which is issued by Barcelona City Council's Department of Statistics. The DIRCE – published annually by the National Statistics Institute (INE) – is one of the most reliable sources for carrying out a study of the city's demographics and business world, as it allows a homogenous comparison of results with the Province of Barcelona, Catalonia and Spain. This summary synthesises its 2013 results for Barcelona, as well as the dynamics of trading company start-ups in the city during the year.

02.01 COMPANY STRUCTURE AND DEMOGRAPHICS IN BARCELONA JANUARY 2013 In January 2013 there were 169,777 companies and 199,642 business establishments in Barcelona. 43.5% of city companies have employees, while more than half have no employees (56.5%). The establishments without employees (56.3% of the total) clearly outnumber those that do have employees (43.7%) as well.

Companies and establishments in Barcelona. 1 January 2013

Companies Establishments

Number %Total Interannual variation Absolute In % Number %Total Interannual variation

Absolute In % Without employees 95.942 56,5 -4.938 -4,9 112.376 56,3 -5.482 -4,7

With employees 73,835 43,5 2.919 4,1 87.266 43,7 3.707 4,4

Total 169.777 100,0 -2.019 -1,2 199.642 100,0 -1.775 -0,9

Source: Produced by the Research Department of Barcelona City Council’s Area of Economy. Enterprise, using data from DIRCE provided by the Municipal Stadistics Department.

Nearly 30% of companies in Catalonia have their head offices in Barcelona (29.2% of the total), while Catalonia has nearly 1 out of every 5 companies (18.5%) in Spain. The development of business between January 2012 and January 2013 shows a decrease of 1.2% due to the loss of 2,019 companies. This is the result of the net creation of more than 2,900 new companies with employees (4.1%) – the first positive result since 2009, the first year for which this series of statistics is available – and the sharp decline in companies without employees (nearly 5,000 fewer, which is 4.9%).Since January 2009, there has been a cumulative decrease in the total number of companies in the city of 5.3%. The main factors responsible for this are a lack of demand and difficulties in obtaining loans during the crisis.

1 Despite the DIRCE data being less reliable for territorial areas below the provincial level, this is a statistically important step forward which should be welcomed as it:

- Offers the most reliable approach available to Barcelona's company census since the reform of the IAE [Economic Activity Tax].

- Provides differentiated data about companies and establishments, thereby overcoming the "head office effect" which often affects sources that provide information referring to company head offices.

- Breaks both companies and establishments down according to three key variables: a) number of employees; b) legal status of the company and c) main economic activity (according to the CCAE-2009).


There are 1,775 fewer establishments in the city than in January 2012 (0.9%). In this case, there is also a contrast with the steep decline in establishments without employees (4.7%) and a significant increase in establishments with employees (4.4%).

Companies by territorial areas. January 2011-2013

Barcelona Barcelona Prov. Catalonia Spain Bcn/Bcn Prov. Bcn/Cat

January 2011 174.926 453.485 601.801 3.250.576 38,6% 29,1%

January 2012 171.796 446.147 592.192 3.199. 176 38,5% 29,0%

January 2013 169.777 438.385 580.804 3.146.570 38,7% 29,2%

Variation 2012/13 -2.019 -1,2%

-7.762 -1,7%

-11.388 -1,9%

-53.047 -1,7%

Variation 2010/13 -7.035

-4,0% -20.533 -4,5%

-28.866 -4,7%

-144.693 -4,4%

Source: Produced by the Research Department of Barcelona City Council’s Area of Economy. Enterprise, using data from DIRCE provided by the Municipal Stadistics Department.

The relative reduction in the number of companies in Barcelona city (1.2%) is slightly less than for the province, Spain (1.7% in both cases) and Catalonia (1.9%). The province has 438,385 companies after registering a negative figure of more than 7,700 companies. Catalonia has lost nearly 11,400 companies, having 580,804 companies in January 2013, while Spain has 3,146,570 companies, which means an interannual reduction of more than 53,000. In practical terms, this development means that Barcelona maintains its proportion of business relative to Catalonia (29.2%) as does Catalonia with the State (18.5%) for the last year. In terms of business density, there are 105.3 companies for every 1,000 inhabitants in Barcelona, a ratio that is much higher than those for the Province of Barcelona (79.1), Catalonia (76.9) and Spain (66.8). In terms of companies with employees, microbusinesses, with between 1 and 9 employees clearly predominate in Barcelona, representing 8 out of every 10 business head offices located in the city (88.3%). Companies that have between 10 and 50 workers represent 9.2% of the total, while only 1.8% have between 50 and 200 workers. Large companies with more than 200 employees represent only 0.6% of the total. Comapnies in Barcelona and territorial areas. 1 January 2013 By employee levels. Absoluts Source: Produced by the Research Department of Barcelona City Council's Area of Economy, Enterprise and Employment, using data from DIRCE provided by the Municipal Statistics Department.


The weight of microbusinesses with between 1 and 9 employees in Barcelona (88.3%) is slightly lower than for the province, Catalonia and Spain, where these companies represent 88.8, 89.5 and 90.7% of the total, respectively. By contrast, medium-sized and large companies have a higher weight in Barcelona (2.4%) than in the province (2.1%), Catalonia (1.9%) and Spain (1.5%). In terms of company size, the number of microbusinesses and companies with more than 200 workers has increased compared to the previous year in all the territories analysed, with significant increases in Barcelona (5.1% and 8.8%, respectively). This is a notable positive development because the year before the number of large companies decreased by 8.1% in the city, while the number of microbusinesses remained stable (0.2%). On the other hand, the companies suffering the biggest interannual decrease in Barcelona are those with 50 to 199 employees (5.7%), followed by those without employees (4.9%) and those with 10 to 49 employees (3.1%). For Catalonia and Spain, the companies with 10 to 49 employees show the worst figures (with interannual decreases of 5.9 and 6.9%, respectively). Interannual variation of number of companies by employee levels. 2012-2013 (in %)

Source: Produced by the Research Department of Barcelona City Council’s Area of Economy. Enterprise, using data from DIRCE provided by the Municipal Stadistics Department. 02.02 ANALYSIS BY LARGE SECTORS In terms of large sectors, in Barcelona more than 4 out of every 5 businesses are service companies (87.3%), a figure which is the result of adding commerce and repairs (19.5%) to the rest of the services (67.8%). Construction accounts for 9% of all companies, while industry represents 3.7% of the total. A greater amount of outsourcing can be seen in the city's businesses compared to Catalonia and Spain, as both these territorial areas show the service sector to be 7 points below that of Barcelona's. The weight of commerce is slightly higher in both Catalonia (22.4%) and Spain (24.3%), but for the other services, Barcelona is 10 per cent above the figures for Catalonia and the State, due to the greater diversification of its services. Construction and industry show a higher percentage in Catalonia and Spain, at around 13.5 and 6.6% of business, while the city's figures are 9 and 3.7% of the total, respectively. Compared to January 2012, the number of industrial companies fell by 6.2% and construction companies fell by 9.4%, while commerce (3%) experienced a less severe decline and the other services (0.9%) registered a slight increase for this indicator.


Companies by large sectors. January 2013 (% s/total) * The data for Barcelona may have a larger error margin than for the other territorial areas. Source: Produced by the Research Department of Barcelona City Council's Department of Communication and Economic Forecasts from DIRCE data issued by the Municipal Statistics Department. Source: Produced by the Research Department of Barcelona City Council's Area of Economy, Enterprise and Employment, using data from DIRCE provided by the Municipal Statistics Department.

02.03 ANALISY BY AREAS OF ACTIVITY

In terms of classification by economic areas, it can be seen that more than a quarter of the city's companies (26.3%) belong to business services – a wide range of professional, scientific, technical and administrative activities, as well as auxiliary services. Commerce and repairs represent 19.5% of business, followed by education, health and social services and construction (with 10.3 and 9%, respectively), administrative activities, real estate and catering, all of which have a weight that varies between 6.3 and 7.3% of the total. The percentage for industrial companies (3.3%) is much lower than the weight of employees in this area for the city (8.4%). This is because manufacturing companies have a higher average size than service companies. Distribution of companies by economic sectors. January 2013 (% s/total)


Source: Produced by the Research Department of Barcelona City Council's Area of Economy, Enterprise and Employment, using data from DIRCE provided by the Municipal Statistics Department. In terms of the development of services from January 2012 to January 2013, there was notable growth in the number of finance and insurance companies (5.4%), education (4.3%), business services – the most numerous in absolute terms – and real-estate activities (both of which show a 2.2% increase), while health and social services activities and artistic, recreational and leisure activities were stable (0.1 and 0.2%, respectively). In contrast, catering, information and communications, and other services, experienced moderate decreases (0.6, 0.9 and 1.3% respectively), while more significant falls occurred in both transport and communications and commerce (4.4 and 3%, respectively). In the secondary sector, there was a notable increase in electricity, gas, steam and air-conditioning companies (14.6%) but manufacturing industry is still heavily influenced by the impact of the crisis (7.8%), as is construction (9.4%). Development of companies in Barcelona by economics sectors

January 2013 Increase January 2012-13

Business services* 44.622 2,2 11 Commerce and repairs 33.095 -3,0 41 Construction 15.221 -9,4 48 Health and social services activities 12.344 0,1

Real-estate activities 11.858 2,2 Hostel and catering 10.770 -0,6 Transport and storage 8.566 -4,4 Other services 7.384 -1,3 Information and communications 5.902 -0,9 Manufacturing industries 5.589 -7,8 Education 5.083 4,3 Artistic, recreational and leisure activities 4.557 -0,2

11 Financial and insurance activities 4.083 5,4 41 Electricity, gas, steam and air conditiong 533 14,6 48 Water, sanitation, waste products and decontamination 136 -6,2

Extration industries 34 3,0 Total 169.777 -1,2

*Business services contain professional, scientific, technical and administrative activities and auxiliary services. Note: The data for Barcelona may have a larger margin of error than the data for the other territorial areas. Source: Produced by the Research Department of Barcelona City Council's Area of Economy, Enterprise and Employment, using data from DIRCE provided by the Municipal Statistics Department.

Companies in knowledge-intensive sectors

There are 65,654 companies – with and without employees – in knowledge-intensive sectors in the city, which represents 38.7% of the total number of companies in Barcelona2. The largest number are service companies (5,366 in state-of-the-art technology services and 59,513 in other high-knowledge services), which means that services as a whole represent 98.8% and industry – with 775 companies – 1.2% of knowledge-company head offices in the city. Compared to 2012, the number of high or medium-high knowledge companies has increased by 1%, a favourable development that contrasts with an overall reduction of city businesses (1.2%). It is worth noting that the number of other knowledge-service companies has increased by 1.3%, while knowledge-intensive

2 In the analysis of Social Security Reporting Units, the weight of knowledge-intensive centres in the city is around 28%. According to the Company Directory, the percentage for this kind of company is 37%. This can be explained by the fact that it includes companies without employees, which do not count as reporting units.


services and state-of-the-art technology decreased by 1.1%. High-level and medium-high level industrial activities decreased more sharply (between 6.5 and 9%). Business head offices in Barcelona according to knowledge intensity. January 2013

Activity Companies 2013

Interannual variation 12/13 % total 2013

Hight-technology industrial activities 274 -6,48% 0,16% 21. Manufacture of pharmaceutical products 41 -6,82% 0,02% 26. Manufacture of computer, electronic and optical products 233 -6,43% 0,14% Medium to hight-technology industrial activities 501 -8,91% 0,30% 20. Chemical industries 156 -9,30% 0,09% 27. Manufacture of electronic materials and equipment 110 -6,78% 0,06% 28. Manufacture of machinery and equipment ncaa 180 -5,76% 0,11% 29. Manufacture of motor vehicles, trailers and semitrailers 33 -21,43% 0,02% 30. Manufacture of other transport material 22 -18,52% 0,01%

Intensive knowledge and state-of-the-art Technology services 5.366 -1,16% 3,16%

59. Film, video and television activities; sound and music production 989 -3,13% 0,58%

60. Radio and television broadcasting and programming activities 95 -9,52% 0,06%

61. Telecommunications 285 -2,40% 0,17% 62. Information technology services 3.045 -0,39% 1,79% 63. Information services 316 -3,95% 0,19% 72. Research and development 636 -2,15% 0,37% Other knowledge-intensive services 59.513 1,31% 35,05% 64. Financial mediation 766 54,12% 0,45% 65. Insurance, reinsurance and pension funds 79 -14,13% 0,05% 66. Financial mediation and Insurance auxiliary services 3.238 -1,40% 1,91% 50. Maritime transport and inland-waterway navigation 23 9,52% 0,01% 51. Air transport 20 5,26% 0,01% 69. Legal and accountancy activities 11.512 -0,10% 6,78%

70. Central office activities; business management consultin activities 1.313 2,02% 0,77%

71. Architectural and engineering technical services 9.249 0,11% 5,45% 73. Advertising and market studies 4.341 6,24% 2,56% 74. Other professional, scientific and technical activities 4.905 1,45% 2,89% 78. Activities Connected to employment 541 1,50% 0,32% 80. Security and investigation activities 164 -1,80% 0,10% 58. Publishing 1.172 -0,51% 0,69% 85. Education 5.083 4,29% 2,99% 86. Health activities 11.610 0,15% 6,84% 87. Social services activities with accommodation 332 -3,49% 0,20% 88. Social services activities without accommodation 402 1,52% 0,24% 90. Creative, artístic and theatrical activities 2.418 -1,95% 1,42% 91. Library, archive, museum and other cultural activities 627 8,10% 0,37% 92. Activities related to games of chance and gambling 416 -6,94% 0,25% 75. Veterinary activities 206 -1,90% 0,12% 93. Sport, recreational and leisure activities 1.096 2,24% 0,65%


Total head offices of mèdium to high knowledge companies 65.654 -0,98% 38,67%

Font: Elaboració del Departament d’Estudis de l’Àrea d’Economia, Empresa i Ocupació de l’Ajuntament de Barcelona a partir de les dades del DIRCE difoses pel Departament d’Estadístiques municipal.

02.04 DEVELOPMENT OF TRADING COMPANIES IN 2013

According to data from the Spanish National Statistics Institute facilitated by the City Council's Department of Statistics, 7,067 trading companies were created in Barcelona in 2013,334 more than in 2012, which represents an interannual increase of 5%. This means that the number of newly-created trading companies increased for the third year running and reached its highest level since 2008, although in absolute terms it is still a long way from the levels achieved before the crisis.

Trading companyies created in the city of Barcelona. 2008-2013

Source: Produced by the Research Department of Barcelona City Council's Area of Economy, Enterprise and Employment, based on INE data. For the Province of Barcelona, 14,221 trading companies were registered in 2013, which is an interannual variation of 10.4%, higher than the average figures for Spain (7.2%) and Catalonia as a whole (9.4%). Of the company start-ups in Spain, 7.6 and 15.2% were in the city and province of Barcelona, respectively. Trading companies created in the main Spanish urbans areas, *Catalonia and Spain, 2013

Trading companies registered 2013

Ratio companies created / 1000 inhab.

City Barcelona 7.067 4,38 Barcelona province 14.221 2,57 Madrid 19.657 3,06 Valencia 5.118 2,01 Seville 3.804 1,96 Màlaga 4.704 2,92 Zaragoza 1.593 1,64 Biscay 1.813 1,58 Catalonia 17.708 2,34 Spain 93.365 2,00

*Provincial data.


Source: Produced by the Research Department of Barcelona City Council's Area of Economy, Enterprise and Employment, based on INE data. On the other hand, in 2013, the ratio of companies created per one thousand inhabitants in the city of Barcelona (4.38) is the highest of all large urban areas in Spain, and, together with the ratio for the province (2.57), it is also higher than the ratios for Catalonia and Spain (2.34 and 2.0, respectively). Trading companyies wound up in the main Spanish provinces, Catalonia and Spain

Trading companyies wound up 2013 Varation 2012/13 (%)

Barcelona province 1.722 -1,5 Madrid 5.336 11,1 Valencia 893 11,3 Seville 1.023 28 Màlaga 899 12,7 Zaragoza 730 10,3 Biscay 796 -3,3 Catalonia 3.006 3,8 Spain 24.735 9,1

Source: Produced by the Research Department of Barcelona City Council's Area of Economy, Enterprise and Employment, based on INE data. Also in 2013, 1,722 trading companies were wound up in the Province of Barcelona. It is worth noting that Barcelona and Biscay are the only major Spanish provinces that show a reduction in the number of company closures compared to 2012 (1.5 and 3.3%, respectively), a development that contrasts with the increase for Catalonia as a whole and for Spain especially (3.8 and 9.1%, respectively). The province accounts for 7% of all company closures in Spain in 2013. An analysis by economic sector of trading company registrations in Barcelona3 shows that business services, which include professional, legal and administrative activities, account for more than 15% of all new companies included in the Barcelona mercantile registry in 2013, and together with commerce (13.9%) they constitute nearly 30% of registrations in the city. Catering and information and communications each account for 5.8% of the total, while manufacturing industry and financial activities have relative weights of 4.3 and 4%, respectively.

Companies registered in the Barcelona mercantile registry by econòmic sectors 2013.

3In an analysis by sector of the companies registered, construction was not included because there are no consistent results, due to a data-management problem at the Mercantile Registry.


Source: Produced by the Research Department of Barcelona City Council’s Area of Economy. Business and Employment, based on informa data from the Mercantile Registre. *The construcction sector has been excluded. In Barcelona, 2,036 companies dedicated to knowledge-intensive activities were created in 2013, which is 28.6% of the total, a percentage which coincides with what these sectors represent for city business as a whole. Of these companies, 95.7% belong to the service sector, in which legal and accounting activities, IT services and central offices activities, all business services, have a particularly significant weight.

Sectorial distribution of knowledge-intensive companyies registered in 2013 (%)

Sectorial distribution of ICT registered in 2013 (%)

Source: Produced by the Research Department of Barcelona City Council’s Area of Economy. Business and Employment, based on informa data from the Mercantile Registre. *The construcction sector has been excluded. There were also 326 new ICT companies registered in the city in 2013, 308 services companies and only 18 ICT manufacturers. ICT company registrations represents 4.6% of the total, a percentage that is higher than the sector's share of the total number of city companies (2.6%). By areas, there is a notable presence of entrepreneurism in information technologies, with 246 new companies registered. Lastly, it is worth noting that in 2013, the subscribed capital of trading companies registered in Barcelona more than doubled (117%) and reached a volume of over 744 million euros,4 the highest level since 2007 and the second highest in the available data. As regards the average subscribed capital per company, if an operation of exceptional volume in August is discounted, the figure is around 53,600 euros, the best result since 2009.

4 This high volume is mostly explained by an operation carried out by Aigües de Barcelona in August.


Subscribed capital in trading companyies registered in Barcelona (in milions of euros)

Source: Produced by the Research Department of Barcelona City Council's Area of Economy, Enterprise and Employment, based on INE data.

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