Valencia’s Economic Outlook: Growth and Slowdown in Focus
The Economic Situation and Perspectives Report issued for the second quarter by the Valencian Community Business Confederation forecasts a growth of about 4% for Valencia in 2022. This projection implies a stronger expansion than previously anticipated. Even as conflicts abroad push up energy and raw material costs, extend supply chain disruptions, and keep inflation high while interest rates rise, the region faces a general slowdown in Spain and the euro area. The report also highlights rising uncertainty about future conditions. Tourism and several manufacturing sectors remain the primary drivers behind the growth seen so far.
The domestic mood, despite troubling external signals, supported a solid rebound for Valencia in the second quarter. On the demand side, growth was propelled by dynamic foreign trade, a return to higher household consumption, and a revival of private investment, notably in housing, paired with a decline in public spending. On the supply side, the hospitality sector stood out as a major growth engine. Activity in hospitality reached levels close to those of a typical year, and several manufacturing sub-sectors showed strong momentum. Notable contributors included transport and warehousing, construction, textiles and clothing, leather and footwear, and the production of shipping materials.
Nevertheless, analyses that incorporate expectations from sectoral business associations in the Valencian Community indicate a continued slowdown for the regional economy in upcoming quarters, aligned with a softer national trajectory. The pace of growth is expected to remain steady, but the same forecast points to continued job creation alongside the slowdown.
In line with these projections, the Valencia Community is anticipated to maintain a reasonable level of activity and employment into the third quarter. Yet there are clear signals that the growth impulse is weakening outside the tourism-related industries, signaling a more cautious near-term path for the regional economy.
In summary, the community’s economy shows resilience amid international headwinds, with a notable performance from tourism and allied sectors. The near-term horizon points to stable activity and job creation, but a clearer deceleration is visible beyond tourism, underscoring the need for ongoing structural and policy measures to sustain momentum across other industries.