Due to an anticipated recovery in regional and global economic conditions, and improving consumer and investor confidence, the Portuguese construction industry is likely to fare slightly better over the next five years.
According to Timetric’s new report, the industry’s output value is set to rise at a compound annual growth rate of 1.2%, increasing significantly from the negative value of -10.76% during the previous review period (2010-2014). Government investment in residential, infrastructure and commercial markets will support this growth, as will positive developments in domestic and regional economic conditions.
The Portuguese construction industry has been suffering a decline in output value since 2008, having contracted from US$47.6 billion to US$25.5 billion in 2014, in real terms. This reflected the sharp contraction in Portugal’s economy amid the financial crisis in the eurozone and the collapse in the country’s property market.
Around 50% of the total value of the Portuguese construction industry is accounted for by infrastructure construction, and it is expected to retain its large share over the forecast period. Backed by the government’s plan to improve the country’s transport infrastructure with its Transport and Infrastructure 2014-2020 project, the infrastructure market is expected to record a positive growth over the forecast period.
Commercial construction holds a 15% share of the total industry’s value, making it the second largest during the review period. The market contracted to around €2.9 billion in 2014, with the poor performance being caused by a high unemployment rate, reduced consumer spending and an indigent fiscal policy. During 2014 however, the rate of decline has slowed due to an increase in consumer and investor confidence and improvements in economic conditions. Over the forecast period the market will be supported by increasing construction activities in the leisure and hospitality and retail buildings categories, as a result of the growing tourism and retail industry in the country.
Adapted from press release by Rebecca Bowden
Read the article online at: https://www.worldcement.com/europe-cis/14102015/anticipated-improvements-for-portuguese-construction-industry-768/