Valencia’s economy narrowly avoided a trade deficit in , posting a trade surplus of just €244.8 million, a dramatic decline from the €1.4785 billion surplus recorded at the end of . The region’s trade performance reflects a year where imports consistently outpaced exports, eroding over €1,200 million of the previous year’s positive balance.
While the Valencian Community’s trade situation remains stronger than Spain as a whole, which currently has a negative trade balance, the region experienced a clear weakening in a traditionally strong area of its economy. Overall exports from the region increased by 1.5% in , reaching €37.5414 billion, according to the Territorial Directorate of Foreign Trade. However, imports surged by 5.1% to €37.2966 billion, driving down the surplus.
The province of Valencia experienced a particularly stark reversal, ending with a trade deficit of €3.820 billion – a 25% increase from the negative balance recorded in . This downturn is largely attributed to significant struggles within the automotive industry.
Exports from the automotive sector plummeted by 12.6% last year, extending a six-year losing streak. The decline isn’t isolated to Ford Almussafes; sales of automotive components abroad also fell sharply, dropping 31% in a single year, indicating widespread difficulties within the Valencian automotive supply chain. This has resulted in a shift from a previous export surplus in cars and parts to a €230 million import surplus in .
Despite the challenges in manufacturing, the agro-food sector continues to be a key pillar of the Valencian economy. With €9.6 billion in exports, representing over a quarter of the region’s total exports, the sector saw an 8.5% increase. Citrus fruits remain a significant export, but meat products experienced a particularly strong surge, increasing by 41%.
The goods and equipment sector also showed positive growth, rising 6%. However, these gains were not enough to offset the decline in automotive exports and the overall increase in imports.
Looking at trade partners, the impact of geopolitical shifts is evident. Exports to the United States fell by 9.7% in , while imports from the US decreased by 5.8%. Conversely, sales of Valencian products to China grew by more than 39%, although the import value from China (€684 million) still significantly outweighs exports.
The automotive sector’s woes are reflected in port activity. Data from November shows Valencia exported €1.91 billion and imported €2.16 billion, resulting in a negative trade balance of €34 billion. Vehicle trade at Valenciaport declined by 11.75% in October , and by 10.43% for the period from January to October , mirroring challenges faced by the automotive sector globally, including labor shortages and geopolitical tensions.
The situation highlights the vulnerability of the Valencian economy to external shocks and the importance of diversifying its export base. While the agro-food sector provides a degree of resilience, the continued decline of the automotive industry poses a significant risk. The region’s ability to navigate these challenges will be crucial in maintaining its economic stability in the coming years.
The narrowing surplus also underscores the broader economic trends impacting Spain. The country as a whole is facing a negative trade balance, and the Valencian Community’s experience suggests that these pressures are likely to persist. The impact of global trade dynamics, including tariffs and geopolitical instability, will continue to shape the region’s trade performance.
