Construction in Portugal – Key Trends and Opportunities to 2017 by Timetric


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									Construction in Portugal – Key Trends
and Opportunities to 2017

Reference Code: CN0119MR
Published: March 2013

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1 Executive Summary
1.1     Market Size, Share and Growth Rates

 Figure 1: Portuguese Construction Industry – Market Size, Share and Growth Rates

Source: Timetric analysis                                                                                © Timetric

      The Portuguese construction industry valued EUR21.9 billion (US$28.2 billion) in 2012, recording a CAGR
      of -9.71% during the review period. All construction categories registered negative growth during this
      period. This is largely a result of economic deceleration following the financial crisis and austerity
      measures implemented by the government.

      Infrastructure construction was the largest construction category, with a share of 53.2% of the total
      construction industry value. While earlier governments made large investments in infrastructure, such
      investments had to be curbed as part of the terms of the nation’s IMF and EU bailouts. Furthermore,
      budget cuts as part of the government’s austerity measures for 2013 will affect the growth of the
      infrastructure construction market. The Portuguese government is trying to renegotiate PPP deals with
      private firms under a motorway concession contract, which could create savings for the government.

      Commercial construction recorded a CAGR of -11.69% during the review period, valuing EUR3.4 billion
      (US$4.4 billion) in 2012. Consumer spending is low owing to large debt, record unemployment rates and a
      depressed economic outlook. The IMF and the EU have urged the government to increase VAT for
      intermediate services to 23% and the minimum rate of tax to 13%. A further increase in tax could mean a
      sharp decline in the number of tourists, a further decline in the retail sector and a consequent decline in

      Residential construction recorded a CAGR of -16.76% during the review period − the largest decline of all
      the construction markets in Portugal. Unlike Spain or Ireland, Portugal did not experience a housing
      bubble, so property construction and prices did not record a dramatic rise or decline as in some other
      European nations. Virtually all approved loans have variable interest r
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