Valencian AC

Valencia’s economy shrank by 9.7% in 2020 due to the effect of the COVID-19 health crisis. This decline was smaller than it was for the Spanish economy as a whole (–10.8%). Although the tourism sector, the hardest hit by restrictions on mobility, carries considerable weight in the Autonomous Community, it is less dependent on international tourism and the industrial sector performed better than the national average.

Content available in
November 5th, 2021
Comunitat Valenciana
5,029,000
inhabitants (2019)
€23,206
GDP per capita (2019)
9.3%
of Spanish GDP (2019)
4.9%
GDP growth forecast (2021)
Regional economic structure and position
  • The Valencian Autonomous Community is the fourth largest Spanish economy, accounting for 9.3% of domestic GDP.
  • It has a population of 5 million inhabitants, 10.6% of the Spanish population, making it the Autonomous Community with the fourth largest population.
  • The total GDP per capita is 23,206 euros, which is 87.4% of the Spanish average, having declined in the first decade of this century, partly due to higher population growth.
  • In terms of production specialisation, the region is notable for the relative importance of its manufacturing industry (15.1% vs the Spanish average of 12.3%) and trade, transportation, hotels and restaurants and leisure (29.2% vs 28%) and real estate activities (12.6% vs 16.6%).
  • The region is highly export-oriented, with the export of goods making up 27% of regional GDP, and it has a coverage ratio of 114.6%. It is the Autonomous Community with the third highest volume of exports of goods, after Catalonia and Madrid. In 2020 they totalled 28.623 billion euros, 11% of all Spanish exports.
  • The main products exported are: food (23% of the total), the motor vehicle industry (19.2%), chemical products (13.6%) and construction materials (11.2%). The Autonomous Community provides 52% of all Spanish exports of construction materials, 41% of all footwear, 25% of all fruit and pulses and 24% of all furniture.

Table of structural indicators

 

   

1989

1999

2009

 

2019

GDP per capita

Euros

 

7,351

13,941

20,352

 

23,206

100 = Spain

 

98.9

95.4

88.2

 

87.8

Population

Thousands of inhabitants

 

3,842

4,104

4,990

 

5,029

Average annual growth over the decade (%)

 

0.7

0.7

2.0

 

0.1

% of total in Spain

 

9.9

10.1

10.7

 

10.6

% of population > 65 years old

 

4.7

5.0

4.8

 

5.3

Exports of goods as a proportion of GDP

%

 

...

23.8

16.7

 

27.2

 

 
Macroeconomic situation

Valencia’s economy shrank by 9.7% in 2020 due to the effect of the COVID-19 health crisis. This decline was smaller than it was for the Spanish economy as a whole (10.8%). Although the tourism sector, the hardest hit by restrictions on mobility, carries considerable weight in the Autonomous Community, it is less dependent on international tourism and the industrial sector performed better than the national average.

After a weak start to the year due to the rise in restrictions, a recovery in activity has been observed since the end of the state of emergency in May. As a result, our forecasts indicate that GDP will grow by 4.9% in 2021. Specifically, we expect an upturn in economy activity, which will become stronger in the second half of the year thanks to the recovery in domestic tourism and the arrival of vaccinated tourists with no restrictions on mobility from the EU.

GDP

Last actualization: 05 November 2021 - 12:59

Although employment in the region was harder hit than average in Spain, it has since performed better. In August, the figure for registered workers affiliated to the Social Security was 2.4% higher than it was in August 2019 and the number of non-furloughed workers was 1.2% higher. The number of furloughed workers has fallen to 19,416, 1.2% of workers affiliated to the Social Security.

The retail trade indicator has performed relatively better than the national average during the crisis. In the first six months of the year, sales were 2.1% lower than in the same period in 2019 (3.4% on average in Spain). Moreover, the CaixaBank consumption indicator shows a notable recovery in the summer months, with 5.4% growth in the first week of September compared to the same period in 2019.

Industrial production has also performed better than in the country as a whole throughout the crisis, contracting by 5.8% in 2020, which was a smaller decline than the 9.2% average, thanks to the strong performance of the energy sectors. To date, the region’s IPI is 1.0% below 2019 levels.

In 2020, exports fell less sharply than they did in the country as a whole (–8.7% vs –10.2%), thanks to the vigorous export sales of fruit, pulses and vegetables, offsetting the contraction of the motor vehicle industry.

Although tourism is highly important in the region, it depends less on international tourism than Spain as a whole, so it has performed better than average. According to the latest figures, tourist activity has recovered quickly during the summer. In July, overnight stays fell by 17% compared with July 2019 (–75% in April).

CaixaBank consumer index

Last actualization: 05 November 2021 - 13:05

Tourist overnight stays

Last actualization: 05 November 2021 - 13:08

Table of indicators

 

 

2002-2007 average

2008-2014 average

2015-2018 average

2019

2020

2021

Latest figure

Activity and prices

Real GDP*
(% year-on-year change)

3.3

–1.9

2.7

2.1

–9.7

2020

3.5

–1.3

2.8

2.0

–10.8

Retail trade**
(% cumulative annual change)

–4.1

1.9

2.5

–4.5

–2.1

July-21

–3.7

1.8

2.5

–5.6

–3.4

Industrial production index**
(% cumulative annual change)

0.4

–3.4

1.7

1.3

–5.8

–1.0

July-21

1.9

–4.2

1.7

0.6

–9.2

–4.1

Service activity index**
(% cumulative annual change)

–3.2

4.9

4.5

–11.0

–0.8

June-21

–3.4

5.5

3.9

–15.6

–6.9

Consumer price index
(% year-on-year change)

3.1

1.3

1.1

0.5

–0.4

2.9

July-21

3.1

1.4

1.1

0.7

–0.3

2.9

                 

Labour market

Registered employment affiliated to Social Security**
(% year-on-year change)

3.7

–3.2

4.0

3.1

–1.5

2.4

August-21

3.5

–2.3

3.4

2.6

–2.1

0.8

Unemployment rate
(% active population)

9.7

22.9

19.3

14.1

16.2

16.7

Q2 2021

10.0

20.8

18.5

14.1

15.5

15.3

Unemployment rate for under 25s
(% active population < 25)

19.6

46.4

42.5

31.2

36.6

41.6

Q2 2021

20.4

44.5

41.5

32.6

49.6

38.4

                 

Public sector

Public deficit
(% of GDP)

0.8

–3.0

–1.7

–1.9

–1.2

2020

–0.3

–2.5

–0.8

–0.6

–0.2

Autonomous Communities public debt
(% of GDP)

10.8

23.4

41.8

41.8

48.6

49.4

Q1 2021

6.0

13.8

24.5

23.7

27.1

27.6

                 

Real estate market

Housing prices
(% year-on-year change)

–6.5

3.1

4.2

2.2

4.3

Q2 2021

–6.8

5.8

5.1

2.1

3.3

Housing sales
(% cumulative annual change)

–7.3

15.3

–4.2

–21.2

26.3

June-21

–8.7

13.4

–2.4

–17.2

31.8

                 

Foreign sector and tourism

Exports of goods**
(% cumulative annual change)

3.0

4.4

2.6

2.7

–8.7

–1.4

June-21

6.8

4.2

4.5

2.0

–10.2

2.8

Tourist overnight stays**
(% cumulative annual change)

3.5

0.9

4.9

0.6

–63.8

–54.6

July-21

2.4

1.1

3.4

0.6

–69.3

–63.9

Notes: *The 2020 GDP figure for Autonomous Communities is an estimate made by CaixaBank Research. ** The changes from the same period in 2019 are calculated.

Source: CaixaBank Research, based on data from the National Statistics Institute (INE), the Bank of Spain, the Ministry of Labour, Migration and Social Security (MITRAMISS), the Ministry of Finance and DataComex.

Regional comparison

Below we show a series of charts comparing the main indicators for the various regions.

Regional comparison

Last actualization: 27 October 2021 - 10:31