Portugal at a Glance
Working in PortugaliStockphoto
Portugal and the Euro have not always had the most positive relationship.
Portugal: An Economic Overview
It is quite possible that, in the minds of people with little idea of what Portugal is all about these days, the country is mainly associated with its quality produce – olives, oranges, cherries, to name a few – its world-renowned wines, and with tourism. A lot has changed since the days when this was true. Today, Portugal presents you with a highly diversified job market with a strong emphasis on services: roughly 60% of the workforce produces three quarters of the national GDP in this sector.
Although more traditional sectors such as agriculture, forestry, and fishing are still important in terms of employment – 12% of the workforce is employed in the primary sector – the significance of industry and services has long overshadowed them.
Investing in the Future
In recent years, the economy of the country has been massively diversified, opening up employment opportunities for locals and expats that go well beyond the “classic” options of working in Portugal’s automotive, textile, oil refining, or tourist sectors. Many companies specializing in research and modern technologies are now based in Portugal’s industry cluster areas, which can be found in many of the large cities around the country. Not only Lisbon and Porto are notable in this respect, but also cities such as Braga, Évora (which is the future hub for companies in Portugal’s up-and-coming aerospace sector, if everything works out according to plan), and, in the case of the textile industry, the northern part of the country in general.
Some of the hopeful new sectors that are gaining foot in Portugal include the ever-expanding and improving ICT sector, green energies – the companies working in Portugal’s renewable energies sector are among the world leaders in their niche – biotechnology, and the aforementioned aerospace industry.
The country has had to face a number of challenges with which it is still trying to cope. These challenges do not only make working in Portugal a rather risky, if not unattractive option for the average expat, but have put a lot of strain both on the Portuguese economy and its society. With the oppressive burden of the financial bailout of 2011 and the austerity measures that came with it, government spending, which has long been an important pillar for working in Portugal, has decreased substantially. Even worse, earnings of people working in Portugal’s vast public sector have been drastically reduced.
The immense importance of public consumption for many companies working in Portugal has been problematic in view of the steadily declining overall consumption in the inherently quite limited local market. This has obviously also put a strain on tax earnings, seeing how people working in Portugal became more and more reluctant to actually spend their hard-earned money. After all, the per capita GDP of Portugal is among the lowest in the EU – a fact that is not balanced out by similarly low costs of living.
Actually working in Portugal is out of sight for a very large portion of the population. The unemployment rate in 2014 is projected to exceed 18%. This figure is not made up by seasonal or low-skilled workers who are out of a job – a university degree is not a guarantee for employment, as many graduates have had to find out the hard way.
The Long Road to Recovery
There have, however, been attempts at countermeasures. The export of goods and services has gained in importance in the past years, with more and more companies setting up shop in Portugal, but producing for foreign markets. The country’s most important trade partners are the EU, USA, and many former colonies with close economic ties to Portugal. Apart from tourism, exports are the only true growth sector in which a career working in Portugal seems feasible at the moment. Affordable prices for travels to the country with all its touristic selling points ensure that the hospitality sector stays profitable.
Foreign investment, although still far below the pre-crisis figures, is another important stepping stone on Portugal’s hard way to economic recuperation. However, many foreign investors have shifted their interest away from Portugal in favor of Central and Eastern European countries, as well as Asia. With the overall outlook for 2013 and 2014 being less than favorable (with current prognoses expecting the economy to shrink by 3% and more), it might not be a good time for expats to devise plans of working in Portugal on their own.