Palencia’s economy is primarily driven by agriculture, with the surrounding Tierra de Campos region being a significant producer of cereals, sunflower oil, and other crops. The city also has a well-developed manufacturing sector, particularly in the automotive industry, with Renault operating a major factory in the region. In addition, the food processing industry is an important economic driver, with local products like cured meats and cheeses gaining popularity across Spain.
Tourism, although not as prominent as in some of Spain’s larger cities, plays an increasingly important role in Palencia’s economy. The city’s historical and cultural appeal, combined with its peaceful atmosphere, attracts visitors looking for an authentic Spanish experience. Local crafts, particularly woolen textiles and pottery, are also part of the region’s traditional industries and offer visitors the chance to take home unique, locally-made goods.
Palencia’s growing reputation as a hub for both agriculture and manufacturing positions it as a city of economic importance in Castille-Leon.