Over a 25 year span, the sector evolution of Spain's economy is similar to that of western liberal democratic states. Agriculture production has declined significantly (from contributing 16.7 percent of the GDP in 1974 to 3.2 percent in 1999), service has expanded (from 48.8 percent in 1974 to 63.2 percent in 1999), and industry has remained somewhat constant (hovering around 34 percent). Although these overall trends are similar to those found in western industrialized states, industrial production is comparatively higher in Spain.
The decline of agriculture is rooted in several different factors. Spain aligned itself with the Common Agriculture Policy (CAP) as part of its membership with the EU, which placed limits on Spanish agricultural production. A drought in the 1990s—particularly in the South—further limited the growth of the industry. These factors, combined with the modernization of farming techniques, caused a significant drop-off in the number of agricultural laborers. In 2000 much-needed rainfall increased agricultural output but also lowered prices as the larger food supply lowered demand. The outlook for Spanish agriculture is not entirely grim, however. Spain's position as the most varied agricultural producer in the EU promises the sector increased growth in the greater European market.
The industry sector constitutes a large part of the GDP due to the strength of mining, manufacturing, and metalworking, which have been important to the economy since the 1960s. At present, Spanish industry has been recovering from the recession of the early 1990s, largely due to growth in the metalworking sector, which includes data-processing equipment and other transportation equipment. While Spain has continued involvement in traditional industries such as mining, it has also focused more on capital-intensive industries such as high technological equipment, which are also attractive for foreign investors.
The service sector is expanding in almost all areas, particularly finance, tourism, and telecommunications. Spanish banks, which constitute some of the largest and most powerful in Europe, have a dual-pronged strategy to enter into other sectors of the economy (such as telecoms) and to expand into foreign markets in both the EU