Portugal Industry

The industrial sector is dominated by light industry, mainly textile and clothing production. In addition, shoes, pulp, cork, fish and vegetable preserves, cement, ceramics, chemical and electrical articles are manufactured. The heavier industry consists mainly of iron and steel mills, shipyards and mines. In 2015, the industry was estimated to have contributed more than one fifth of Portugal’s gross domestic product (GDP) and employed almost a quarter of the formal workforce the year before.

The industry is highly concentrated in the coastal cities, mainly Lisbon and Porto. There are not many large companies. Most companies are small or medium-sized with a maximum of 500 employees. Many industries are outdated and face increasing competition from other low-wage countries, primarily in Asia and Eastern Europe.

During the period 1998-2005, industrial production fell every year, but then turned upwards again for a couple of years. From 2008, it was adversely affected by the international economic downturn (see Finance). This applies not least to the construction industry, which expanded greatly in the late 1990s, underpinned by large government construction projects. When projects were completed, the trend reversed and in recent years the construction industry has shrunk, also because several large government projects (such as a new major airport outside Lisbon) had to be put on ice because of the economic crisis.

During the 1990s, foreign-owned manufacturing of cars became increasingly important, but the car industry has had problems with profitability since the turn of the millennium. The US car company General Motors’ decision to close its factory in Portugal in 2006 was a major setback to the development of the car industry. However, there is still the German Volkswagen factory Autoeuropa, which opened in the mid-1990s and, after a weak few years into the 2000s, again shows good results: in 2013, 200,000 cars were produced by 3,000 employees. New investments in the plant until 2019 were estimated to create another 500 jobs.

  • COUNTRYAAH: List of top trading partners of Portugal. Includes countries that imported most shipments from and exported most goods to the country.

The government is trying to promote the development of high-tech industries, such as technology for sustainable energy extraction. Some successes were noted in the mid-2010s, but the lack of skilled labor is an obstacle.




Portugal receives a higher credit rating

December 15

The credit rating agency Fitch raises Portugal’s credit rating from BBB to BB +. Fitch believes in the continued improvement of the Portuguese economy, partly because the government debt will decline for the first time since the debt crisis began, to the equivalent of 127 percent of GDP.

Finance Minister Centeno new chairman of the euro group

December 4th

Portugal’s finance minister Mário Centeno is appointed new chairman of the euro group. Under his leadership, Portugal has managed its public finances, with decent growth and a relatively small deficit in the state budget, at the same time as the socialist minority government has been able to ease some of the austerity policy.


Portuguese budget arouses EU concern

November 22

The European Commission has issued a warning that Portugal’s budget for 2018 will not succeed in keeping within the given eurozone framework. But unlike 2016, there are no fines. The Commission is asking for some clarification, including what the Portuguese government intends to do to save around EUR 400 million. It also expresses concern over major economic gaps. The richest fifth of the population earns almost 6 times as much as the poorest fifth.

Portugal is affected by severe drought

November 21st

Both Portugal and Spain have been hit by severe drought. According to the Portuguese weather service, as many as 94 percent of the country is affected, and the situation has worsened in October, when it is usually raining a lot. The country’s water reservoirs were only filled to 40 percent.


The government survives distrust

October 24th

The government survives the disbelief vote put forward by the bourgeois party CDS-PP, following a series of fires that claimed over 100 lives since last summer. The government is supported by 122 members, while 105 of them vote for the declaration of no confidence.

Criticism against the government is growing

October 18

The criticism is growing against the government’s handling of forest fires, both during the summer and autumn. Interior Minister Constança Urbano de Sousa resigns. She says she had been ready to leave as early as June.

President M arcelo Rebelo de Sousa calls on Parliament to decide whether the Socialist minority government can remain. He emphasizes that a new government must be given a strong mandate to implement reforms and prevent new and similar disasters. The President has the power to dissolve Parliament.

At least 41 dead in forest fires

October 17

At least 41 people are killed in a series of forest fires in central and northern Portugal. Dry chips and harsh winds have caused fires to spread rapidly over large areas. Prime Minister António Costa says the government will now take a series of measures to improve fire protection. The government announces three days of country grief.

Assuncao Cristas, from the bourgeois party Democratic and Social Center People’s Party (CDS-PP) criticizes the Socialist government’s way of dealing with the fire crisis. The party raises a distrust of the government. Local politicians and groups are also protesting in Lisbon against the lack of fire protection.

Success for the Socialist Party in the local elections

October 1st

The Socialist Party achieves a clear success in local elections and gains power in 158 of the country’s 308 cities with a total of 38 percent of the vote. Socialists retain power in Lisbon and in nine of the 15 largest cities. In Porto, however, an independent center candidate wins. The Social Democrats make a bad choice, but win in 96 cities. However, the party is only in third place in Lisbon and Porto. It is speculated whether Pedro Passos Coelho will be able to remain as party leader.


More power to the municipalities is promised

August 29th

The summer forest fires reveal the problems caused by so much of Portugal being ruled from Lisbon and the large gaps that exist between the urban population along the Atlantic coast and the poorer rural areas inland. The austerity policy 2011 to 2014 has hit hard on all municipal services, and only 14 percent of public funds are channeled through the municipalities, compared with 25 percent in the rest of the EU. The government is giving Eduardo Cabrita to investigate how power can be decentralized, among other things to give the municipalities greater influence over schools, care, the police and transport, but also how the flight from the countryside to the cities can be slowed down.


Deficiencies in alarm service are investigated

June 27

It is clear that at least 64 people died in connection with forest fires earlier this month. Criticism is now being directed at the country’s emergency services, as it is revealed that information from emergency calls has not reached the firefighters. The government appoints an investigation into this.

Over 60 dead in forest fires

June 19

Severe forest fires require over 60 lives in the Pedrógão Grande region in the middle of the country.


Bank executives punished for fraud

24th of May

After a six-year trial, two former bank executives are sentenced to prison for fraud and money laundering. The supreme chief Jose Oliveira e Costa is sentenced to 14 years in prison and the second, Luis Caprichoso gets 8.5 years. Ten other defendants are sentenced to lower sentences. The judge calls the case the biggest fraud case in the country’s history. The bank in question, Banco Portugues de Negocios, was nationalized during the financial crisis that was triggered in 2008. A billion deficit occurred in the bank’s accounts. In total, the state’s intervention in the bank’s business is estimated to have cost taxpayers EUR 5 billion.


Prosecution against Angolan politicians

February 24th

Portugal’s state prosecutor decides to prosecute Angola’s Vice President Manuel Vicente for corruption and money laundering. The decision is criticized by Angola, which warns that it could lead to a deterioration in the “good relations” between the countries.


Soares dies

January 8

Former Prime Minister and President Mario Soares dies at the age of 92.

Portugal Industry

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