Alicante industry feels with a special intensity Consequences of inflation, rising rates and slowdown in activity The global economy slowing down consumption in Europe. According to the calculations of the Alicante Chamber of Commerce Studies Office, the production of factories in the province decreased by 5.9% points to a decline so far this year much higher than those recorded at the national level -which resulted in a contraction of 0.9%- and is also higher in the months from January to September than the regional figure of -3.2% in the analyzed period.
It is also an evolution with its own characteristics impact on employmentdue to decrease in sales 1,086 job losses In the past year – between October 2022 and the same month this year – the number of people employed in this activity in the sector brought the total number of people employed in this activity in the province to 90,861. A decrease of 1.2%, which contrasts with the increase of approximately 4% recorded in the construction and services sectors, which continues the good development of the labor market.
The chamber’s own technicians describe this greater decline in Alicante industry as “High specialization in some consumer manufacturing They remind that “and intermediate industrial products” are the segments that recorded the highest decline at the global level. shoes, textiles, toys and furniture The sectors most sensitive to consumption changes alone represent 35% of all factory production in the region.
We should add to the above the declines recorded by the manufacturing industry. plastic or paper and cardboardCompanies that supply intermediate goods to other sectors. The only branches that escaped the decline were electrical, computer and optical equipment manufacturing, but their low relative weight in the province prevents them from being able to offset declines in the remaining segments. study.
Supply
The report highlights that, following a strong recovery in 2022, for example, where Social Security membership increased by almost 10% due to the end of the pandemic, the evolution throughout the year is as follows: more less. It is also a noticeable development in the supplies companies make to guarantee their production.
In this way, raw material import by Alicante factories dropped up to 20% Purchases in the third quarter of the year semi-manufactured –components, packaging etc.-, They experienced a decrease of nearly 60 percent. These figures are largely due to the decline in the order book and the increase in finished product stocks accumulated in factories, shaking the confidence of businessmen.
These low sales, along with the slowdown in energy and raw material prices, are starting to be reflected in prices. Prices fell at an inter-year rate of 6.1% in the third quarter and remained at a modest 1.4% if energy prices fell. discounted.
As if this were not enough, the Chamber reminds that the industry is one of the sectors most sensitive to the price increase in the country due to the volume of investment it requires. cost of bank financingIt is the country that suffers the most due to interest rate increases to stop inflation, as well as the tightening of the conditions that businesses set when granting new loans.
Another key to the situation is Decrease in demand from foreign marketsIt was greatly affected by the slowdown in the main countries of the eurozone. Thus, while the province’s industrial exports increased by 15 percent in the first quarter of the year, it decreased by around 1.4 percent in total in the first nine months of the year. 4.226 million turnover.
Perspectives
Looking ahead to next year, report forecasts progress improvement in demand abroadr, as major European economies begin to recover and overcome the consequences of inflation. In this sense, the study refers to IMF forecasts showing that the euro area as a whole will grow from 0.7 percent in 2023 to 1.2 percent in 2024.
From a sectoral perspective, the export expectations of the sectors are taken into consideration, taking into account the expected development of the main export markets and the main products exported to each of these markets. manufacturing of intermediate industrial products (metallic manufacturing, marble and natural stone, chemical products, paper and rubber manufacturing), automotive components, and some consumer manufacturing such as textiles or furniture, this will be offset by declines in sales of footwear, leather and leather.
Export prospects for the sectors of machinery manufacturing and other capital goods, food and beverages, and non-metallic mineral products for construction are slightly less favorable.