Despite a slowdown in key macroeconomic indicators and the cloud of threats and uncertainty on the horizon, large family businesses in the province of Alicante remain optimistic about the development of their operations and many anticipate higher income across the current year. When asked about the economy at large, though, their view grows more cautious and less confident.
From the outside, the mood resembles a strong pulse of confidence. Aefa conducts one of the world’s most insightful x-ray surveys among its partners every year during the general assembly, revealing how the province’s business community feels as a whole. The sentiment is influenced by inflation and uncertainty around tax relief, yet the overall result shows only modest distortions in outcomes from the previous year. It is also important to consider the context of May, when the invasion of Ukraine had already begun and energy and fuel prices were at historic highs, shaping early expectations.
Consequently, the share of companies anticipating higher revenues rose slightly from 9.1 percent to 12.1 percent, while the majority still predicts continued growth. In fact, 69.7 percent of respondents expect higher income, a figure broadly in line with what was forecast in 2022. Conversely, those predicting a flat or declining revenue total 18.2 percent, down two percentage points from the prior year.
Similar patterns appear in employment forecasts. About 48.5 percent of large enterprises expect to expand their workforce during the year, a six point decline from last year but still indicating a healthier job market than elsewhere. Around 54.5 percent foresee no change in staffing levels, while only 3 percent anticipate cuts. Nearly half of the firms also plan to preserve their existing payrolls, reinforcing a generally stable labor outlook.
As in previous years, and as CIS research often shows, business people tend to rate their own situation more favorably than the general economic trend. When the indicators behind the forecast are opened up, only 21.2 percent of those surveyed expect the economy to improve this year, 39.4 percent anticipate it will stay the same, and another 39.4 percent foresee a worsening national and regional backdrop.
Inflation
The dominant concern for Alicante entrepreneurs remains inflation, which topped the list of problems last year. It has shifted to a lower position this year as energy costs appear to have cooled somewhat. However, input costs remain elevated, and the trajectory is closely watched by business leaders across the province.
On the supply side, talent shortages persist. Twenty point nine percent of respondents identify the lack of skilled workers as the most urgent challenge, underscoring ongoing difficulties in recruiting qualified personnel in sectors like technology and construction. Material shortages rank fourth on the list, and surprisingly the rising cost of financing does not appear as a top concern until the fifth slot, reflecting a mixed funding climate over the past year.
Puig bows to his partners: high incomes and high net wealth will increase tax burden
In terms of government policy, the administration and political circles face pressure to ease the tax load. Almost a quarter of those surveyed prioritize tax relief as a key issue. This theme has been echoed in recent speeches by the Aefa president. The second major ask is to streamline public administration and reduce administrative costs, which rank at 16.5 percent among respondents. The discussion also touches on inheritance tax, where regional deductions in the Community of Valencia stand to benefit family businesses of all sizes as reforms extend deductions more broadly.
The ongoing tension about the economic situation remains a central theme of the survey. Business leaders express clear dissatisfaction with the political environment, a sentiment that dwarfs concerns about the economy itself. In this wave, 83.3 percent rate the national political situation as the worst possible outcome, a rise from last year. Within the Community of Valencia, 57.6 percent view regional governance as a significant weakness, though this still represents a regional majority feeling on the matter.