Fresh US investment in Portugal at nearly €1Bn between 2014 and 2019
United States fresh investment in Portugal from 39 companies stood at €1Bn from 2014 to 2019, creating 6,806 jobs in mostly new projects.
US investment exceeded US$1.1Bn (€991 million) and created 6,806 jobs according to the report ‘Barometer of American Companies in Portugal’.
The ‘barometer’ published today (Monday, 26 October) is a study resulting from a partnership between AmCham (American Chamber of Commerce in Portugal) and consultants PwC. Its goal is to reflect on the relevance of US companies on the Portuguese economy and its financial development over the past few years.
“Between 2014 and 2019 48 US investment projects were undertaken in Portugal, corresponding to US$1.176Bn or €991 million. In other words 4% of all investment made in Portugal,” says the document.
“These projects were developed by 39 companies and enabled the creation of 6,806 jobs, the majority (77%) in new projects and 23% in the expansion of existing projects” states Barometer which was presented in the webinar ‘American Investment in Portugal – Foreign Direct Investment, a pillar of economic development”.
Both in terms of the number of projects, and the value of the same, the information technology sector “was the sector with the most US investment in Portugal (29.7%), in other words, US investor activities in Portugal was mostly centred in technology, with some giants such as Google, Amazon and Uber setting up shop and expanding their business areas in Portugal,” states the study.
After information technology, the communications sector attracted the most investment (22.4%), followed by textiles (13.1%) and real estate (12.3%).
From the study period of 2014-2019, 2018 was one of the busiest years with 3,065 jobs created and €590 million in capital investment netted.
In terms of direct ‘stock’ investment by the US in Portugal, this had reached €1,938,3 million euros by the end of 2019.
That represents 1.3% of DFI in Portugal, while investment in the first quarter of this year “achieved €1,956 million (1.4% of the total).
Last year, Portugal was the 8th most attractive country in the EU in which to invest for overseas investors (EY ‘Attractiveness Survey Portugal 2020’), having attracted “a record number of DFI projects, with 158 in total.”
“From among the countries which invested the most in Portugal – the usual candidates figure such as France, the UK and Germany, but the US saw its share weight on the statistics increase as the main investor in Portugal in 2019, with 26 DFI projects,” states the study.
In 2018, the number of overseas companies with branches in Portugal stood at 6,825, employing 487,000 people with a GVA (Gross Value Added) of €22Bn.
However, US company branches in Portugal represented 13.7% of all overseas branches or 15% GVA.
The study added that according to distribution per sector of countries of origin, in terms of foreign branches with the greatest GVA, those from the US “occupied one of the three main positions in four distinct categories: In 2018 they were sector leaders in ‘Other Services’, registering a percentage of 18.6% of GVA generated by foreign branches”, and occupied second position in ‘Accommodation and Hospitality’, contributing 15% to the GVA of the same branches.”
‘Construction and Real Estate Activities’ came in third, a long with ‘Information and Communication,’ contributing 11.1% and 14.9% for branch GVA respectively.
In terms of the sample, almost 1000 US companies studied showed that 50% had been operating in Portugal 10 years or more, while 28% had been operating for 20 years or more which revealed the continuity and stability of US investment in Portugal.
In terms of sales, around a half in 2018 presented amounts that were equal or above US$1 million, while 4% of the companies analysed exceeded US$100 million.
In terms of regional distribution, Lisbon has the most US companies (61%) with sales representing around 78% of the total in 2018, followed by Madeira in terms of branches.
However, Porto and the North followed the Portuguese capital in terms of the greatest number of sales.
The weight of the 963 US companies analysed on the Portuguese economy “was significant in 2018” in that the effect on the level of sales on Portugal’s GDP “represented around 4.5% of the national total, or over €9Bn.”
US companies in Portugal were responsible for employing 49,000 staff in 2018.