The drop in consumption, a drag on industrial output, is also weighing on invoicing. In the first half of the year, the turnover of group companies fell by 10.2 percent. In Alicante, metal, toys, and footwear stand out as key sectors but are at the center of worry. The Milan shoe fair, running through this week, signals a broad slowdown in some of the industry’s core international markets; how deep the downturn will become remains uncertain.
The Valencian Community, with Alicante at its center, is bearing the brunt of inflation and the fall in demand driven by higher interest rates. In simple terms, shrinking purchasing power and economic uncertainty pushed industrial production down 6.4 percent for the year, marking the largest drop since the onset of the health crisis.
The deteriorating business climate is also visible in company results. Metallurgy, among the hardest hit, saw turnover collapse by 22 percent. Claudio, the president of the Federation of Metal Entrepreneurs of the Province of Alicante, notes that many firms serve multiple sectors that are heavily hit by reduced consumption and higher borrowing costs. Investments in machinery and modern production processes have been scaled back. He warns that a dangerous cycle is taking hold and competitiveness is slipping away.
Turnover in toys fell by 12.2 percent, driven partly by oversupply pushed through distribution channels which left orders at minimal levels in the first half of the year. Jose Antonio Pastor, director general of the Spanish Association of Toy Manufacturers, explains that the situation is expected to improve in the latter part of the year as exports show signs of recovery. This optimism rests on early positive signals from foreign markets.
Footwear leads the decline in Valencian industrial output
Footwear emerged as the segment most affected by the need to adapt to the new market conditions. The sector experienced a drop in production and a corresponding fall in turnover, which declined by 6.8 percent. Marián Cano, president of the Valencian Association of Footwear Entrepreneurs, cautions that as with fashion in general, non essential goods show the clearest signs of reduced consumption. At the Milan Micam fair, 57 footwear companies from the region participated, and by Tuesday another 39 component firms joined Lineapelle in the same Italian city. Cano stresses that participating companies are operating, yet buyers are voicing concerns about the current climate. “The slowdown is evident, and only time will tell how far it will go,” he remarks.
Textile turnover also declined, though less sharply, by about 4 percent. This Tuesday marks the start of Home Textiles Premium by Textilhogar in Valencia, a key benchmark for the local textile sector. According to Pepe Serna, president of Ateval, the autonomous association for textiles, this event should offer a clear read on how the crisis is affecting performance across the industry.
Meanwhile, the food sector registered a modest gain with turnover up 2.8 percent. The mixed results across sectors reflect a market adjusting to inflation, fluctuating demand, and shifts in consumer priorities across the Valencian Community.