61% of construction companies engaged in residential and non-residential building in the Balearic Islands are in a situation of maximum or high risk of non-payment, according to data from the Insight View report prepared by Iberinform, the commercial information subsidiary of Crédito y Caución. The analysis shows a deterioration of three percentage points compared to the previous year, placing the Islands as the territory with the worst evolution among the main provinces of the sector in Spain.
This worsening places the Balearic Islands as the province with the greatest deterioration of credit risk among the six with more weight in the construction sector, ahead of Malaga and Madrid. Specifically, Balearic construction companies account for 7% of the national fabric, a significant proportion compared to Madrid (16%) or Barcelona (11%), according to the same study, to which Europa Press has had access.
At the national level, 42% of construction companies have a maximum or high risk of default, which is a slight worsening compared to the data recorded in 2024. The report stresses that the behavior of the sector continues to be conditioned by the lack of skilled labor, the difficulties in accessing financing and the loss of dynamism in new building permits, factors that also directly affect the Balearic Islands and the real estate market as a whole.
The impact of the rising cost of construction materials continues to put pressure on companies’ commercial margins, a circumstance that aggravates the financial fragility of the sector, especially among smaller companies. This context is particularly sensitive in island territories such as the Balearic Islands, where logistics cost overruns add additional pressure to the construction business.
Atomization of the sector
The Iberinform study also highlights the strong atomization of the sector, since 97% of construction companies are micro or small companies, while large companies account for barely 0.3% of the total. This business structure explains, in part, the greater exposure to the risk of non-payment, as they have less financial capacity to absorb cost tensions or drops in activity.
By territories, the Balearic Islands leads the deterioration of credit risk among the main provinces of the sector, followed by Malaga, where 56% of the companies present a high risk, and Madrid, with 47%. On the opposite side, the lowest levels of risk are recorded in Murcia (36%), Alicante and Seville (38%) and Barcelona (40%), according to the report’s data.
The age of the companies is also a key factor in the level of risk, since 54% of the construction companies have been in business for less than ten years. In this group, 51% are at maximum or high levels of default, while the percentage drops to 31% among companies with a history of between 11 and 25 years, and stands at 32% among those with more than 25 years of activity, which shows the importance of business consolidation in the sector.
