Economic activity slows down in July

  • Lusa
  • 18 August 2021

In July, the economic climate indicator decreased, remaining at a higher level than in March 2020, according to the new data from INE.

Economic activity recorded a slowdown in July, with the economic climate indicator decreasing, but remaining at a higher level than at the beginning of the pandemic (March 2020), Statistics Portugal (INE) released on Wednesday.

According to the data advanced by the INE, the economic climate indicator retreated from 2.2 points observed in June to 1.4 points in July.

“In July, the economic climate indicator decreased, remaining at a higher level than in March 2020. Also for July, the available indicators – vehicle sales, ATM network operations and cement sales – point to a slowdown in economic activity,” it said.

According to INE, the most recent information, available for June and July, reveals less intense year-on-year growth rates than in the previous months, with this evolution being influenced, to a large extent, by a base effect, as the comparison focuses on a period of relief from the restrictive measures to combat the pandemic.

Except for the turnover index in industry, it said, in general, short-term indicators have not yet reached in June the levels of the same period of 2019, particularly in tourism, with quantitative summary indicators (economic activity, private consumption and investment) showing less intense growths in June 2021 than in the previous month.

According to the Employment Survey, the unemployment rate stood at 6.7% in the second quarter of 2021, 0.4 percentage points below the rate observed in the previous quarter, and 1.0 percentage points above that recorded in the same period of 2020.

The labour underutilisation rate, in turn, stood at 12.3% and total employment increased by 4.5% over the same period of 2020, with the volume of hours worked increasing by 32.1%.

The year-on-year change in CPI was 1.5% in July (0.5% in June), with the manufacturing output price index recording the highest growth rate of the series and a year-on-year change of 9.7% in July (7.3% in the previous month).