After the heavy blow caused by the pandemic effect, it was difficult for the provincial industry to recover its activity, but it finally succeeded with the continuous growth in turnover figures. However, this positive dynamic seems to have been interrupted, as evidenced by the fact that: Industrial Production Index (IPI) fell 4.6% year-on-year. Behind this decline is the decrease in consumption as well as the stock accumulated through distribution. Moreover, in a scenario where exports suffer from inflation and rising rates.
Data published by the National Institute of Statistics (INE) show that the index fell by about 4.6% last June in the Community of Valencia and, accordingly, in the province of Alicante. a much higher percentage than the 1.4% registered in Spain as a whole. The reason for this difference is the factor related to the type of dominant sectors in Alicante, dedicated to the production of manufacturing and consumer goods, which is just now failing.
IPI, in particular, fell in six autonomous communities and fell in another eleven. The Canary Islands (8%), Madrid (4.2%) and La Rioja and Cataluña recorded the largest increases at 3.4%, while Murcia (-13.2%), Asturias (-9.1%) and Andalusia (- 6.3) recorded the highest increases and decreases. Also, so far this year, industrial production in the Community of Valencia has fallen by 1.6% compared to the average for Spain, which recorded a 0.2% decline. With the decline in June, the index fell to negative rates on an annual basis after recording a 0.2% increase in May.
The sector that fell the most in the 6th month of the year was the energy sector., down 9.5% year-on-year. Durable goods (-3.3%) and intermediate goods (-3.1%) were next, while capital goods and non-durable consumer goods increased by 4.6% and 1.7%, respectively.
Seasonally and calendar adjusted industrial production decreased by 2.4 points in June compared to the same month of the previous year and decreased by 3%. On a monthly basis, that is, compared to May, industrial production was 1%, 1.5 points behind the rate recorded in the 5th month of the year.
But what is behind this decline in activity? The main industrial sectors of the province of Alicante agree on the irrefutable issue of the decline in consumption.. This was expressed by Marián Cano, president of the Valencian Footwear Entrepreneurs Association (Avecal), who has not hesitated to point out that there has been a change in trend in recent months. «People prioritize fun and vacation this summer“Companies, who were far from receiving the orders they recorded last year, are realizing this at this time when the market is displaying extraordinary behavior after the worst moments of the pandemic.”
And this phenomenon does not only occur at the national level, it also makes itself felt in foreign markets, such that exports suffer. According to Cano, “Germany, a very important destination for our industry, is in recession and we are also seeing negative signs in the United States.”
Shoemakers’ hope lies in what might happen after the summer, but the sentiment hasn’t been very positive from the start. Fingers crossed but There are still worrying factors such as the ongoing inflation and the increase in interest rates. which, among other things, made mortgage loans more expensive, so we don’t know what’s going to be fashionable,” he emphasizes.
Luis Rodríguez, president of the Alicante State Metal Entrepreneurs Federation (Fempa), with similar expressions, also affected issues such as the increase in the price of money, Unreturned energy costs and high inflation. “All of this – he emphasizes – causes consumption to suffer, which is something companies are far from being foreign to”.
Rodríguez also refers to another factor such as: overstock. So keep in mind that the pandemic has brought about a break in distribution chains, causing people to oversupply with a return to normalcy for fear that the same thing could happen again. “The result – he points out – there’s a surplus in warehouses right now, so we’ll have to wait for it to come out”.
Pepe Serna, president of the Valencia Community Textile Entrepreneurs Association (Ateval), also points out that the activities of the companies have decreased in the last three months. “It points out that consumption is lower, and it doesn’t seem to improve after the holidays when people face school fees and mortgages.”
“Besides—he adds—the giants China and the United States are not having a good time indoors, so they are trying to leak more goods from our main markets.increased competition.
The toy industry is no stranger to this. José Antonio Pastor, director of the Spanish Association of Toy Manufacturers (AEFJ), points out: Consumption has stopped since the beginning of the yearand beyond the fact that events like the overwhelming success of the Barbie movie could have a positive impact on the industry as a whole, the forecasts aren’t very optimistic.