The Institute of Economic Research of the Province of Alicante (INECA) urged policymakers to implement measures aimed at preventing a slowdown in the regional economy amid the ongoing economic crisis. The organization’s report on the socioeconomic situation in Alicante for the third quarter of 2023 identifies international tourism and construction as the primary growth engines for the local economy. According to Nacho Amirola, president of INECA, there is a visible slowdown that necessitates expanding business scale, promoting strategic alliances, and supporting investments through targeted fiscal policies, a skilled workforce, and regulatory improvements. The goal is to accelerate the region’s transformation while strengthening industrial ventures without ignoring other sectors that contribute significant social capital and average company size (Source: INECA).
By the close of the third quarter of the previous year, signs of slower growth were already apparent, though Alicante remains a dynamic zone, as INECA cautioned. The province showed strong job creation but the rising number of business liquidations drew attention. The data indicate 159 company terminations in Q3 2023, compared with 179 closures in the same period a year earlier. This points to greater dispersion in company stability and a reduced likelihood of employment growth over time (Source: INECA).
When combined with a social capital profile that trails the Valencia region and the national average, Alicante faces vulnerability to market shifts. Quino Palací, coordinator of the Working Committee, emphasized the need to stabilize the province’s manufacturing base, noting that the pace of firm dissolutions and new establishments has not yet reached a balance for the sector. The focus remains on strengthening the industrial backbone while preserving gains across other industries (Source: INECA).
Although INECA observed improvements in most socioeconomic indicators, it warned that the markets remain unprepared to fully absorb the current reality. Global uncertainty tied to conflicts in the Middle East and Eastern Europe, plus tensions in major sea routes, is expected to influence activity in the last quarter of the year. The report stresses vigilance and coordinated action across sectors (Source: INECA).
One recommended path is closer collaboration among provincial and regional institutions. INECA works with business groups and social organizations to lay the groundwork for actions that prevent a downturn by promoting proposals that engage all economic sectors. Palací underscored that industrial zones are losing leverage for employment, highlighting the need to stimulate industrial hiring and expand the size of those firms (Source: INECA).
Engines of the economy
National hotel tourism declined by 12 percent, aligning with the report’s warning. However, a 9.7 percent rise in international demand helped cushion overall performance. INECA emphasizes renewed confidence in the tourism sector, particularly given the strong activity at Alicante airport, and calls for measures to strengthen this key driver of the province’s economy (Source: INECA).
Construction is identified as another major lever. INECA data show 1,476 new homes authorized in Alicante during Q3, up 594 from the previous year. The indicator for new construction visas rose 67.3 percent year-on-year in the quarter, while the national trend declined by 1.4 percent. This revitalization has enabled Alicante to reclaim market share from 3.4 percent a year ago to 5.78 percent in this quarter, signaling a shift in the housing market dynamics (Source: INECA).
Employment also posted gains in the third quarter, with several positive months pushing the historical records higher. The Institute notes that unemployment figures are improving and remain steady at around 131,000 workers. While this brings the region closer to pre-crisis levels, it remains distant from the 52,000 unemployed reported in 2001 (Source: INECA).
Export
Llopis notes that exports for January through September reached 5.319 billion euros, a figure very close to the previous year’s pace and reflecting a marginal 0.6 percent year-on-year increase and roughly 24.7 million euros in gains. INECA had previously flagged concerns about the continued slide in foreign sales, a trend seen in the prior quarter compared with 2022 (Source: INECA).