Portuguese exporters feel the heat from France’s political crisis

 In Exports, News, Trade, Trade and Investment

Portuguese companies exporting to France are getting spooked over the current political and social instability in the country.

With the far-right National Rally putting in a strong performance in the first round of legislative elections in Portugal’s second biggest export market (after Spain), and from which so much of its Foreign Direct Investment (FDI) originates, businesses are naturally apprehensive.

Various exporters consulted by ECO online, like Suffa which exports sofas, believe the “current political ad economic crisis is affecting consumer confidence” in France and sales as a result, according to its CEO, André Fernandes.

Last year, Portuguese companies exported €10.1Bn of goods to France, the equivalent of 13% of total national exports, with the French market occupying second place in the raking of counties to which Portugal most exports its goods and services.

Between January and April this year, exports to France totalled €3.4Bn, down 4% like-for-like on 2023, or 12.9% of all Portuguese exports.

As for imports, France is Portugal’s third major supplier, worth 7% of total imports (€7.3Bn) according to the latest data from the National Statistics Institute (INE) and AICEP.

France is also the second major FDI investor in Portugal, with around €17.4Bn invested last year, slightly above the €17.3Bn posted in 2022 according to the Bank of Portugal.

“France has a very important role in Portugal, with large groups like Airbus and Renault investing”, said Lauren Marionnet, Managing Director of the Portuguese Chamber of Commerce (CCILF) in comments to ECO last week.

France is the main market for Portuguese furniture exports, representing around 32% of sales worth €710 million. Portuguese exports in 2023 stood at €2.2Bn.

Gualter Morgado, executive director of the Portuguese Association of Furniture and Related Industries (APIMA) says that in the first quarter of this year, the French market fell 10% compared to the same period of the previous year. For the furniture association, there is no doubt that the sector is facing a “clear economic slowdown” and if political instability and social unrest continue in France that might only aggravate the situation.