Five sectors that did well under Covid
Although the Covid-19 pandemic dragged many sectors of the economy down with the worst results on record, some sectors in Portugal did well in 2020 despite the lockdown.
According to the National Statistics Institute IINE) there were five activity branches that enjoyed growth on the same period in 2019.
The information was also based on information from the platform e-fatura run by the Portuguese tax authorities, (Autoridade Tributária e Aduaneira (AT)).
During the first nine moths of 2020 the overall turnover in terms of taxable income saw a like-for-like fall of 14.8%.
According to an analysis from the INE, in the period of March to November 2020, “Just six sectors of economic activity saw an increase in turnover on the same period last year,” all of them linked to the pharmaceutical, telecommunications, IT and construction/real estate sectors.
Sifting through the information, there is the manufacture of Pharma products (+19.8%), scientific research and development (+10.8%), consultancy and IT programming activities (+7.6%), information services activities (+7.6%), telecoms (+4.4%) and real estate and construction (+4%).
The sectors that bombed, however, include: admin activities (-33.3%), petroleum products (-40.3%), restaurants and bars (-43.2%), arts and shows (-50.6%), hotels and accommodation (-67.6%).
All the activities that grew are directly linked to the health crisis, a case in point being the pharmaceutical industry, but also because of the indirect effects of confinement and working from home via laptops, telecoms and IT have also done well.
It comes as no surprise that all the activities related to tourism or the need for physical contact suffered the most from the pandemic during the nine months under consideration.
Lumping the various economic activities into 13 sectors, the INE concluded that in 21 of the 25 regions of in terms of territorial units (NUTIII), the accommodation activities represented the sector with the largest fall in turn over on the like-for-like period in 2019. Emphasis falls on the Azores (-74.8%), Madeira (-74.6%), Greater Lisbon Region (-73.3%) and Middle Tejo (-72.7%).
However, it was the Algarve region that suffered the most from this fall despite having a lesser turnover decline (66.6%) since this sector represents 11.4% of the turnover amount in 2019 carrying “the greatest economic weight from among the 25 sub-regions of the country.”
Non-export commercial trade and the retail sector — which was once again shut down in January 2021, with the exception of supermarkets, pharmacies, health food/alternative medicine shops, IT equipment shops and repair workshops and garages, which represented 37.5% of the total turnover in Portugal in 2019, saw a like-for-like decrease of 11.5% from March to November 2020.
And in terms of SMEs overall, 37,000 businesses in the hotel, restaurant, bar and catering sectors in Portugal are facing bankruptcy according to the catering association AHRESP.
Says AHRESP as many as 37,000 – the vast majority restaurants and cafés — but also 7,000 local accommodation and short-term rentals may have closed their doors forever by the time the second national lockdown came into effect on Friday last week.
“The Government’s measures of financial support though constantly trumpeted by politicians “seem insufficient to stop the rot,” said the association in a statement.
“We lament the fact that support for commercial rents was not reinforced as it is impossible for businesses that have been forced to close to support this cost in its totality,” it continued.
João Vieira Lopes of the CCP (Portuguese confederation of Commerce and Services), fears that the Government’s financial measures (expected next month) “won’t arrive in time”.
His inference was that if these businesses struggling to survive are not paid by February, it will be too late to avoid permanent closure.
He has also criticised the fact that simplified layoff is only available to businesses obliged to close. That leaves many that have managed to stay open but are in serious difficulties with no financial help at all.
“The criteria (for qualifying for layoff) should be the fall in turnover,” he said.
Mário Jorge Machado of the textile association has warned that without sales, factories will close, while Pedro Sobral of the APEL (Portuguese Association of Book Publishers) has called the decision a catastrophe.”