The Valencian Community is projected to finish the year with growth surpassing 2 percent, a forecast drawn from the Situation Report and Economic Perspectives produced by the Valencian Community Business Confederation, based on third-quarter 2023 data from the regional economy. The regional economy shows a quarterly expansion of 0.3 percent and an annual increase of 1.5 percent, according to the Independent Authority for Accountability.
While this performance outpaces earlier expectations and aligns with the national average, it remains notably higher than the broader Eurozone pace. Sectoral analyses, as reported by business associations, indicate that in the near term the regional economy will cool slightly as part of a longer trend observed since the start of the year. This nuanced outlook underscores a transition from rapid growth to more balanced expansion across key sectors.
Puente emphasizes that the northern terminus of the Valencia port remains sustainable and that rail usage is secure
The report also notes that slower global growth will weigh on most manufacturing lines. The services and construction sectors face headwinds from persistent inflation and higher financing costs, factors that can dampen consumer spending and reduce investment activity.
business challenges
The analysis highlights several pressures facing local firms, including elevated energy prices, rising financing costs, higher costs for raw materials and components, and a renewed upturn in labor costs. It also notes ongoing difficulties in recruiting qualified personnel. Looking ahead to 2024, with a backdrop of expected lower interest rates, the central scenario points to positive growth that mirrors the national pace and remains above the euro area average, with a potential range around 1.5 percent to 1.75 percent.
In response, the Valencian Confederation of Employers calls for an enabling environment that supports business activity and investment flows, strengthening productivity and the competitiveness of the regional economy. It also recommends aligning labor costs with forecasts in the national bargaining framework, indexing public contracts to cost changes, and easing tax pressure toward OECD average levels.