The Business Confederation of the Valencian Community (CEV) points out in its latest situation report published today that the region is the only one of the first four exporting regions with a positive trade balance. The proper functioning of foreign trade is especially relevant for the figures of the Valencian economy, and one of the elements that have helped to boost it, since the Valencian Community has increased exports by 11.6% and has imported less (2.3 %) in the first quarter of 2023.
These are some of the data offered this Monday by the study of the Valencian employers’ association, which is optimistic in its predictions, since it indicates that the economic dynamism will be maintained during the second and part of the third quarter, but “it will lose steam” from the middle of the third , that is, after the tourist season, key in the Valencian region.
The CEV includes the estimates of the AIReF, which points out how the Valencian Community has registered a growth in its economy of 0.4% from January to March and anticipates that, “if this trajectory is confirmed, the Community could reach in the whole of the year an advance of around 2%. The employers argue that both the “own inertia” of the national economy and the lower levels of inflation have a lot to do with both figures.
The director of Economy and Analysis of the CEV, Ricardo Miralles, also points to positive factors such as the “greater resilience of the economy”, such as the deployment of Next Generation aid, a contradiction, the latter because the employers also make ugly in their analysis that “the low execution” of these was the Valencian Community can subtract tenths in local economic growth.
Another element that could slow down the economy in the coming months is the “slowdown in the surrounding economies, linked to the fact that they are important transmitters of tourism; the longer inflation prospects, the lack of qualified labor, the economic situation of a large number of companies that are not yet in pre-Covid situations, or the obstacles of the Create and Grow Law, the same one that generates obstacles to the ceramic sector to access regional aid in the midst of the energy crisis.
The CEV, which always remembers this situation of the tile and even made the PP-Vox pact ugly by the lack of express mention of the industry, ensures that the regulations promoted by the central government are causing problems for thousands of companies when it comes to accessing the aid programs and insists that they are both those associated with the Next Generation EU Funds and those of the State and the Generalitat Valenciana.
The same situation report states that the industrial production of the Valencian Community experienced a decline of 0.46% between the first quarter of 2023 and the last of 2022. And it describes as an “adverse situation” the one that both the “industry of the wood and cork” as well as the “tile industry”, with falls of 20.65% and 19.41%, respectively.
And at the very beginning of the tourist campaign, the CEV acknowledges that tourism has continued to show signs of recovery throughout the first quarter and although it explains that “considerably higher” figures are already registered than pre-pandemic levels, they put the focus in which the analysis of the evolution of tourist spending must be carried out “within the context of high levels of generalized inflation”.
All in all, the contribution made by Hosbec, the hotel employers, in the current situation report does not ring the bell yet: it explains that there are still factors that worry the sector, such as high production costs, the recovery of traditional source markets or “the political instability that may arise as a result of the advancement of the general elections.”
