Despite visible slowdowns in key macroeconomic indicators and the cloud of threats and uncertainties hanging on the horizon, large family businesses in the province of Alicante remain optimistic about their own development. Many expect their income to rise during this period. Naturally, when asked about the overall state of the economy, their perception diverges from the general view, with a notable degree of skepticism about the bigger picture.
From the outside looking in, the annual Aefa survey conducted among its partners during the general assembly offers a revealing snapshot of the mood in the provincial business community. The mood is shaped by concerns such as inflation and tax relief, yet the overall assessment of last year’s performance remains moderately stable. This assessment is also influenced by the timing and context of the assembly, with Maite Antón weighing in after May, when the Ukraine invasion had already sent fuel and energy prices to peaks.
Consequently, the share of companies expecting higher revenue has grown slightly, from 9.1% to 12.1%, but the prevailing trend is a positive one: a majority anticipate continued growth. In particular, 69.7% of respondents foresee higher income, a level close to the expectation registered in 2022. Those expecting revenue to stay the same tally 18.2%, a slight dip of two percentage points.
Similar patterns appear in employment forecasts. Approximately 48.5% of large companies expect to expand their workforce during the period, a six-point drop from last year to 54.5%, signaling a mild slowdown in hiring in the province, yet still well above those planning headcount reductions, which stand at 3%. About 48.5% also expect to retain their current workforce.
As in prior years, and as CIS research frequently shows, one of the standout findings is that businesspeople have a clearer view of their own situation than of the broader economy. When asked to judge the overall economy, only 21.2% believe it will improve this year, while 39.4% think it will stay the same, and another 39.4% fear a worsening of the general conditions.
Inflation
Against this backdrop, inflation remains the dominant concern for Alicante businessmen, having displaced the rise in energy costs as the top worry last year. It currently ranks lower, but energy costs remain a substantial factor at 25.3% of responses. In contrast, talent shortages have jumped to the second spot this year, with 20.9% of respondents citing it as the most urgent issue, reflecting difficulties in finding qualified personnel in technology, construction, and related sectors. Raw material shortages hover around the fourth place, while the escalation in financing costs for companies and individuals does not appear until the fifth position, underscoring the financial pressure building up over the past year.
Puig bows to his partners: high incomes and high net wealth will increase tax burden
The latest responses to demands from administration and political circles show a clear push to reduce the tax burden, with nearly a quarter of those surveyed prioritizing this area. Aefa president Maite Antón has reiterated this point in her recent remarks. A second major request centers on shrinking administrative structures and the associated costs, which 16.5% of respondents view as excessive. The inheritance tax remains a long-standing regional concern, while the Valencia Community’s broader tax relief measures may lose weight if extended to all family businesses, regardless of turnover.
The persistent tension about the economic situation is evident in the survey results. Once again, businesspeople express dissatisfaction with the political landscape, which is rated far worse than the economic situation. Nationally, 83.3% rate the political situation as poor (on a 1-to-5 scale), an uptick from last year’s 81%. In the Valencian Community, the proportion labeling the regional political climate as the worst rises to 57.6%, still a majority.
[Citation: Aefa survey, Maite Antón remarks, 2024 update. Attribution: Aefa press materials]