Companies buying cars made the largest contribution to GDP
Investment grew 9.3% in the second quarter of 2017, mainly driven by the motor vehicle sector: the acquisition of transport equipment rocketed 33%.
Statistics Portugal (INE) revised upwards the second quarter GDP of 2017 to 2.9%. The institute gave further details on the contribution of the different components for the economy’s growth. According to new data, growth was mainly a result of an increase in investment, namely the increase in the acquisition of transport equipment. This acceleration is not coming from families, but rather from companies.
In the second quarter, INE states, internal demand had a 2.7% increase, a strong acceleration in comparison to the 0.8% increase registered in the same period of 2016. Therefore, the positive contribution of internal demand for the growth of GDP increased to 0.8 percentage points.
That evolution is a result of investment, which increased 9.3% in the second quarter, in an year-on-year comparison. In a quarter-on-quarter comparison, investment increased 6%, after the zero quarter-on-quarter variation from the first quarter of 2017.
When considering the different investment components, it is clear which was the main contributor. In an homologous comparison, the Gross Fixed Capital Formation (the purchases of durable goods from companies, especially machines or construction material) accelerated from 9.6% in the first quarter to 10.3% in the second. Within this component, it was investment in transport equipment which accelerated the most: 33.1%, much higher than the 10.6% from the first quarter of this year. “GFCF in Transport Equipment was the major contributor to the acceleration of GFCF in the second quarter, reflecting particularly the evolution of motor vehicles component”, INE states.
Companies are responsible for this growth, since there was a decrease of the growth rhythm, in spite of the fact that families purchased more cars: “Final Consumption Expenditure of Resident Households in Durable Goods registered a less pronounced year-on-year growth, of 3.4% (5.9% in the first quarter), due to the deceleration of the motor vehicles component”, says INE.
The investment in other machines and equipment increased by 12.7%, which represents a deceleration in comparison to 17.6% in the first quarter, while investment in construction accelerated from 8.6% to 9.5% in the second quarter.
