Alfaz Alicante Faces a Mixed Economic Horizon
The Alicante region has lived through a volatile economic cycle since early 2020 when the covid pandemic began. Since then, many companies have shown a remarkable recovery, though they have repeatedly faced hurdles such as rising raw material costs, supply chain disruptions, and shifts in public health restrictions. The situation worsened after the Ukraine conflict, and the subsequent holiday lull cast a shadow over recovery prospects. Energy costs and inflation have raised fears that sales across industry and commerce could falter, while tourism remains confident in its long standing vocation, yet faces near cost pressures. The construction sector has also grown wary as mortgage costs climb higher.
European authorities have warned about the upcoming autumn, foreseeing austere outcomes due to cuts in gas supplies and stubborn inflation that could curb domestic consumption. Against this backdrop, the economic sectors in Alicante have little solid footing to anchor an optimistic outlook for the near future.
The sector hardest hit is grappling with energy bills and disrupted supply chains. Footwear, Alicante’s flagship export industry, is emblematic of this strain. While a recession in the Spanish economy cannot be ruled out by year end, Marián Cano, president of the Valencian Footwear Entrepreneurs Association, has managed to regain foreign sales to pre pandemic levels. Yet she cautions that the threat environment remains and that patience is essential before conditions improve.
Luis Rodrı́guez, head of the Alicante State Federation of Metal Producers, cautions that the recent four tenths drop in the consumer price index signals diminished optimism and predicts a year end that could bring lower sales. Markets are anticipated to tighten and companies may delay investment decisions during this period.
Atila Serna, president of the Valencia Community Textile Entrepreneurs Association, echoes concerns about instability as inflation chips away at purchasing power and sales. He notes that the home textile and sanitary apparel sectors have performed well so far, but non essential products may be among the first casualties if money tightens.
The toy sector faces a comparable set of pressures as the year draws to a close and the holiday campaign approaches. Jose Antonio Pastor of the Spanish Association of Toy Manufacturers highlights ongoing export uncertainty and notes that rising costs and shifts in China’s supply chains will shape how events unfold.
The marble industry finds itself in a sectoral crisis with little light at the end of the tunnel. Alicante’s leadership notes that competition from marbles of different hues and new materials compounds the energy squeeze that hampers the sector’s breathing room.
Plastics, a significant local industry concentrated mainly in Foia de Castalla, is also feeling the heat. Hector Torrente of the local Employers Association explains that the blow has not fully arrived, but a slowdown seems likely. Projects such as the Sagunt gigafactory and Ford’s electric vehicle initiatives are seen as long term catalysts rather than immediate game changers.
The commercial sector remains uncertain about its near-term path. Carlos Baño, head of the regional federation Facpyme, notes that September will be particularly challenging with the post summer return and school reopening, paired with restrained consumer spending due to inflation. Yet there is a belief that business activity might rebound with the New Year, albeit in a slower starting phase.
Construction has enjoyed a robust run in the prior year, driven by pent up demand that accumulated during the hardest moments of the pandemic. However, there are signs that this momentum is fading. Jesualdo Ros, secretary of the Real Estate Developers Association of the State of Alicante, points out that higher mortgage rates could dampen demand, especially among buyers who are credit dependent. He also voices concern over sharply rising raw material costs.
Hosbec reports a strong tourism season with occupancy rebounding to levels similar to a pre pandemic summer. Nuria Montes, general secretary of the hospitality association, suggests that the fall and winter outlook remains positive for those markets still open on the peninsula. But profitability is a concern given rising costs across the board. The restaurant sector mirrors this sentiment with July performance stronger than August, yet a leaner base of paying customers in the late summer remains a concern for many operators.
Agriculture in Alicante is experiencing its most challenging campaign in memory, with losses approaching 200 million euros. Climate change related weather, higher energy costs, increased prices for fertilizer and phytosanitary products, and competition from third countries all compress farm margins. The central worry remains the low prices received by farmers, sometimes dipping below production costs. Jose Vicente Andreu, president of Asaja Alicante, and Carles Peris, general secretary of La Unió, call for a new food chain law to ensure fair earnings for producers and greater controls on fruit imports to maintain a level playing field with local produce.
With a range of sectors facing different pressures, Alicante’s economy continues to navigate a period of adjustment and resilience. The region’s business leaders emphasize the need for prudent investment, cost containment, and adaptive strategies to weather the coming months. The overarching view is cautious but not devoid of opportunity, as firms seek to align with evolving market conditions and consumer realities without losing competitiveness.