Valencian business group forecasts 2.8% regional economic growth in 2026

Economic forecast and quarterly growth

The Business Confederation of the Valencian Community (CEV) published its Economic Outlook and Situation Report for the second quarter of 2026 on 30 September 2026, projecting that the regional economy will expand by approximately 2.8% over the full year. This projected pace of activity places the autonomous community ahead of the expected growth rate for Spain as a whole. Independent assessments from the Independent Authority for Fiscal Responsibility (AIReF) indicated that Valencian gross domestic product increased by 0.8% quarter on quarter and 2.9% year on year during the second quarter of 2026. That quarterly progress exceeded the national rate by 0.1 percentage points and outpaced the eurozone average by 0.2 percentage points. On a year-on-year basis, regional growth surpassed the national benchmark by 0.2 percentage points and stood 1.7 percentage points above the eurozone.

Ricardo Miralles, director of the Department of Economics and Analysis at the CEV, presented the quarterly evaluation in Valencia.

The report points out that the economy performed better than expected in the second quarter.

Domestic demand and investment catalysts

The second-quarter expansion continued to rely heavily on the momentum of internal demand across the regional economy. Private household expenditure sustained a positive trend, bolstered by favorable employment figures and steady labor market participation. Consumption by public administrations also expanded over the period, though at a more moderate tempo than household spending. Capital investment drew substantial impetus from reconstruction initiatives in territories affected by the DANA storm disaster. Additionally, investment activity accelerated as public and private entities moved into the final execution phases of projects financed through the European Union NextGenerationEU funds.

Divergent performance across economic sectors

Supply-side performance revealed notable divergences across productive sectors throughout the second quarter of 2026. The construction sector exhibited substantial momentum, with employment expanding by 19.6% year on year. The services sector maintained high activity levels as business turnover rose by 4.6%, supported by positive tourism inflows recorded between April and June. In industry, business turnover increased by 8.4% year on year and quarterly manufacturing output advanced by 2.03%, pointing to an emerging recovery. Despite these quarterly gains, cumulative industrial output remained down 1.3% year to date, with uneven conditions across individual manufacturing sub-branches. Meanwhile, the primary sector faced ongoing constraints stemming from adverse structural conditions and short-term cyclical difficulties.

Productivity deficits and external headwinds

The CEV analysis identified key structural vulnerabilities beneath the top-line economic expansion. The confederation observed that regional growth is predominantly underpinned by head-count job creation rather than increases in output per worker. Gross domestic product per occupied worker has failed to register parallel improvements, leaving productivity as one of the foremost obstacles to long-term consolidation. Regional enterprises must also navigate an operating environment shaped by an uptick in consumer price inflation. Geopolitical tensions and persistent economic sluggishness in several major European export markets continue to impose constraints on broader business expectations.