Economics in a picture
Around 70% of Portuguese firms have already returned or expect to return to pre-pandemic activity levels
The worsening of the COVID-19 pandemic in early 2021 led to a new general confinement in Portugal, with negative impact on the economy. According to the latest edition of the COVID-IREE survey, conducted by Statistics Portugal and Banco de Portugal, in the first half of February, sales still stood below the normal level for 65% of responding firms (weighted by their business turnover). However, assuming that the pandemic is brought under control this year, 36% of firms expect to recover the pre-pandemic level, 4% do not expect this to happen and 25% do not know if they will return to that level.
The situation is different across sectors. Information and communication services, construction and industry, which have been less affected by the containment measures, show a higher share of firms that have already returned to their normal level. In contrast, in services involving personal contacts, the share of firms that do not expect to return to normal levels of activity is higher, signaling a risk of loss of productive capacity. Accommodation and food services stands out as having the lowest percentage of firms that have already returned to normal and the highest share of firms that expect to stay permanently below the pre-pandemic level. In transportation and storage, trade and accommodation and food services the percentage of firms that do not know if they will recover normal levels also stands out, which may reflect the uncertainty about the evolution of the pandemic and its effects on economic agents’ practices and preferences.
For more details see Fast and Exceptional Enterprise Survey – COVID-19, February 2021 (in Portuguese only), available on Banco de Portugal and Statistics Portugal websites.
Prepared by Ana Sequeira and Cristina Manteu. The analysis, opinions and results expressed herein are those of the authors and do not necessarily coincide with those of Banco de Portugal or the Eurosystem.
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