Growth in business investment to accelerate this year

By TPN/Lusa, in Business · 31-01-2019 10:38:00 · 0 Comments
Growth in business investment to accelerate this year

Business investment in Portugal is set to increase by 4.4 percent this year, driven by spending by larger companies, so accelerating from a 1.9 percent increase seen in 2018, which fell short of the 5.1 percent projected, the National Institute of Statistics (INE) said.

“According to the results found in the October 2018 survey of investment (for the period for 1 October 2018 to 17 January 2019), business investment in nominal terms should show growth of 4.4 percent in 2019,” the INE said.

“The results of this survey also point to a 1.9 percent increase in investment in 2018, reflecting a downgrade in the outlook revealed in the previous survey (of growth of 5.1 percent), particularly in larger companies (with 500 or more staff).”

According to the INE, the projected growth of 4.4 percent of the investment this year is due to the positive contribution of bigger companies.

The investment diffusion indicator – the percentage of companies who report making investments or the intention to invest) – fell in 2017, 2018 and 2019, to 89.4 percent, 80.2 percent and 77.9 percent respectively.

The “main limiting factor” of business investment identified by companies in 2018 and 2019 was a deterioration of the sales prospects, predicting for this year “an increase in the relative weight of insufficient self-financing capacity and the deterioration of sales prospects”. They also cite “a reduction in the relative weight of the difficulty in obtaining bank credit and the difficulty in hiring qualified personnel.”

For this year, there has been a shift in investment objectives towards a greater relative importance of investment geared towards rationalisation and restructuring, while the relative weight of investment associated with expanding production capacity … should decrease, INE says.


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