“Heterogeneous” business prospects for 2024, according to the Business Confederation of the Valencian Community (CEV), which foresees a growth range of between 1.6 and 1.8%. In its latest Economic Situation and Prospects Report for the fourth quarter of 2023, published today, it explains that the regional economy has maintained an “acceptable” growth rate during the first quarter of 2024, although lower than that of the previous quarter, with a high degree of heterogeneity between productive branches.
That is why the employers’ association reminds that “it is necessary to generate a favorable climate for business activity and investment, which favors advances in the productivity and competitiveness of our economy and supports business projects.” And he does not forget to join the criticism that other business entities have already expressed, mainly in Alicante, due to the “negative effect” of an extension of the General State Budgets in the Valencian Community. He also maintains that the main threats come from “geopolitical uncertainty and instability in national politics.”
They also warn that, within the framework of the Next Generation EU Funds – “in the execution of which both Spain and the Community are lagging behind” -, the instability caused by the extension of the PGE may delay the implementation of the reforms that the central government has planned. committed to making with Brussels to be able to access new deliveries of funds.
In this analysis of the behavior of the regional economy, the CEV highlights the complex situation of the primary sector, the adverse situation of the ceramic cluster, the improvement of some industrial branches or the growth of the services sector, a landscape to which is added the reduction of foreign demand, as explained by the director of Economics and Analysis of the CEV, Ricardo Miralles.
Along these lines, for the following quarters, on the demand side, the CEV expects a gradual improvement in investment, some stability in private consumption and a lower contribution from public consumption. The Report adds that the “weak growth of the euro zone” and the rest of the main foreign trade destinations, together with a recovery in imports, will support “little progress” in external demand.
And the employers’ association focuses on the “high” level of financial costs, raw materials and components, transportation, freight and energy costs that companies continue to face. Furthermore, labor costs and the difficulties in hiring specific professional profiles appropriate to business needs paint a complex scenario for the Valencian economy, according to the employers’ association.
