Business investment fell by 16.3% in 2020
In a year marked by the pandemic, business investment in Portugal decreased by 16.3%. Companies should invest a little more in 2021.
Business investment fell by over 16% in 2020, a year deeply marked by the Covid-19 pandemic. For 2021, the outlook is for a modest recovery in business investment, with growth forecast at 3.5%, according to the Investment Survey made by the Statistics Portugal (INE).
“Business investment in nominal terms decreased by 16.3% in 2020, resulting in a significant downward reduction comparing with the perspectives revealed in the previous survey,” which showed a decline of 8.9% already in a context of health crisis.
Before the pandemic crisis, the results of the business investment survey conducted at the end of 2019 predicted a 3.6% growth.
“This evolution in investment expectations in 2020 between the different surveys largely reflects the effects of the Covid-19 pandemic on the economic activity, which led to the cancellation or postponement of investment decisions,” INE explains.
Like other countries, Portugal experienced in 2020 a long period of general lockdown between March and April, severely affecting the activity of many companies. The restrictions returned in force already in the last quarter of 2020 with the second wave of the Covid-19 pandemic. The new year brought a new lockdown, which came into effect in the second half of January.
According to Statistics Portugal, all company types made negative contributions to the variation in investment in 2020, but “the downward revision reached greater expression among major companies, that might have cancelled or postponed investment decisions. ”
For 2021, the results of the survey (which took place between October 1 and January 14) point to a partial recovery in business investment, with a 3.5% growth forecast.
The real estate, transport and storage sectors show the greatest positive variations: +77.4% and +63.1%, respectively.
