The recovery of economic activity has been slower in the sectors most affected by the pandemic containment measures and by the fears of contagion, such as accommodation and food services and arts, entertainment and recreation. The risk of substantial reduction in the income or wealth of households owning businesses in these sectors is higher when all household members who work have their activity in the business, when the business represents most of the household’s assets or when it is an unlimited liability business.

According to the data on the business sector and on the household’s dependence on the business from the Household Finance and Consumption Survey of 2017, the percentage of households owning a business that are highly exposed to the pandemic crisis is higher in Portugal than in the euro area (4.5% versus 3%). In Portugal, this percentage is higher in the two groups aged 55 or over (6.7%). In the euro area, on the contrary, the percentage is higher in the 35 to 44 age group (4.6%) and decreases in the older classes. These different profiles arise from the fact that businesses in sectors with slower recovery are more common in older households in Portugal and in younger households in the euro area, since business dependence increases with age in both Portugal and the euro area.

For further details see Costa, Farinha, Martins and Mesquita (2020). "Business owners in Portugal and the euro area: characteristics and exposure to the pandemic", Banco de Portugal, Economic Studies, Vol. VI, No 4.

Prepared by Sónia Costa, Luísa Farinha, Luís Martins and Renata Mesquita. The analyses, opinions and findings expressed above represent the views of the authors and not necessarily those of Banco de Portugal or the Eurosystem.

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