Despite record employment, productivity is below 2000 levels

Segundo o Snapshot “Compare for Growing”, labour productivity per hour worked, measured in purchasing power parity, corresponded to only 66.9% of the EU average, below the productivity recorded in 2000 (67.6%).

“ In relative terms, Portugal’s position in the working hour productivity ranking has deteriorated markedly since 2000, falling from position 17 to position 24 among the 27 Member States of the European Union”, reads the report.

This is even though the Portuguese economy has recorded record employment figures, with more than five million people employed, representing an employment rate of 79.6%, close to full employment and above the EU average (76.1%).

In this study, four main blocks to productivity are identified: “public and private chronic sub-investment, low-value and low-wage sectors dominate job creation, the predominance of companies with low-scale business fabric and high context costs.”.

To overcome these constraints, the association recommends solutions that go through increasing productive investment “through a regulatory framework that makes licensing processes more stable and predictable”, as well as “promoting business growth by removing obstacles and improving the conditions for their capitalisation”.

BRP also advocates the need to “value the work factor”, by investing in “promoting qualified jobs, in technological sectors and relieving the tax treatment of wage progression”.

According to the calculations of this analysis, between 2011 and 2024, analyzing 12 sectors of economic activity, more than 680,000 jobs were created, with an average annual gross value added (GVA) of EUR 40,4 thousand.

“ More than 60% of the jobs created have an average GVA of only 31.7 thousand euros, which clearly penalizes the increase in productivity”, he concludes.