Nearly 13,000 companies lost in 2021
Nearly 13,000 companies closed in Portugal in 2021, while 1,951 have begun insolvency proceedings in court.
Nevertheless, the numbers are viewed as “relatively low” and below 2019 pre-pandemic levels. The data was released by consultants Informa D&B in its Companies Barometer which shows that the Government’s measures to support companies during the pandemic was the reason that the bankruptcy figures were not actually even higher.
“Before 2020, with relatively favourable economic indicators, there were more closures and insolvencies than in 2021. The various government support packages, including a freeze on loan repayments and/or interest are reasons which explain a reduced number of closures and insolvencies than in 2020”, says D&B General Director, Teresa Cardoso de Menezes.
“There is enormous uncertainty over the future, and State aid was, without a doubt, very important is helping many companies stay afloat, but in may cases their continuity also depended one how cleverly they used these resources to survive,” she added.
The consultants say that the end of State aid packages will likely lead to an increase in closures, but that the State will have this in mind “weighing up not only the risks of unemployment, but also when this is likely to occur”.
“It is different when such closures happen in an upswing, when companies are enjoying an increase in economic activity, than during a period like now when this business capacity, despite recovering well, is still far from the levels seen in 2019,” adds Teresa Cardoso de Menezes.
The Barometer figures show that even in the depths of the pandemic, the Portuguese continued to start companies and take on staff. In 2021, 41,656 new companies were created, +9.6% on 2020, but 15.9% down on the pre-Covid period, although the gap with 2019 was closed on the figures for the second quarter of 2021.
“This, without a doubt was a sign of confidence, and that there are entrepreneurs that know how to seek out opportunities created by new economic and social conditions” adds Teresa Cardoso de Menezes who points out that despite there being new companies in all sectors, there is a clear difference in the dynamics of each.
“Those that were more affected by the pandemic and the restrictive measures are precisely those sectors in which new companies showed a clear difference on 2019, adding that the company dynamic was still very affected by the pandemic”.
Transport, accommodation, catering and hospitality services display “values that are very different from 2019”.
Yet despite the pandemic, 5,292 service companies, 3,758 accommodation and restaurant establishment companies, and 1,955 transport companies were started in 2021, which corresponds to falls of 25,6%, 27,3% and 55%, respectively on 2019.
The real estate, information and communication technology, and agriculture sectors were the most dynamic and the only sectors to do better in 2021 than they had in 2019. Em 2021, 5316 new real estate companies were created, corresponding to a 5,4% increase on 2019. It was the sector which enjoyed the greatest number of companies founded, a trend seen all over the country “with the exception of the large urban centres such as Lisbon, Porto and Coimbra”.