algarve unemployment rate highest ever

By SOPHIE MCCARRICK [email protected]

With the Algarve’s unemployment rate at an all time high (20% in the first quarter of this year), the Algarve Resident contacted those directly involved in tourism – the Algarve’s largest single industry.

Elidérico Viegas, President of the Algarve Hotels and Tourist Resorts Association (AHETA), told the Algarve Resident that in an AHETA proposal which has been sent to the government “on several occasions”, the association had indicated one way of reversing the rising unemployment rate by turning unemployment benefits into training funds.

Elidérico Viegas said that he was not at all surprised that the unemployment rate is continuing to rise. He stated that under the current economic circumstances, hoteliers and tourist entrepreneurs cannot do much more.

“If we can’t increase tourist occupancy and revenue, we have to reduce costs and staff will be hit hard as they represent the highest expense a hotel has,” he said. Potentially, this would further increase the number of unemployed in the area.

“Instead of paying people for not working, we should be able to keep the workers in the hotels and tourist complexes receiving training during the low season. This can only be achieved through partnerships and mutual trust between the public and private sectors,” said Elidérico Viegas.

Looking closer into the effects the Algarve’s unemployment rate is having in the region, the president of the Association of Algarve Hoteliers and Related Businesses (AIHSA), Daniel do Adro, said: “I don’t believe the service standards of hotels in the Algarve will be affected by the 20% unemployment rate, because hotels carefully plan their operations in accordance with demand and seasonality.

“What may to an extent affect the quality of service provided by individual hotels are the low rates or overly aggressive promotions offered by some hotel units. Balanced prices are necessary if a higher standard of service is desired,” he concluded.

Construction in the area is also being hit very hard due to these challenging times.  

President of the Almancil Business Association (AEA), Dr. Gilberto de Sousa, said: “We are all very concerned about the current situation, which leads to more criminality and reduced purchasing levels, affecting all businesses and individuals negatively.

“The measures taken by the government to reduce the problem are not enough and we really need more incentives to help resolve the serious financial situation that 90% of companies find themselves in, particularly in the construction sector. This is becoming unsustainable,” he concluded.

The Algarve Association for Construction Companies and Public Works (AECOPS) estimates that, unless overdue debts are settled, at least 4,000 individuals directly and indirectly linked to the construction sector will lose their jobs by the end of June. This is something which the Algarve (and the individuals) can ill afford.

Speaking to Lusa news agency on May 16, regional deputy for AECOPS, Manuel Gonçalves, said that figures released by the INE do not come as a surprise: “Until local authorities pay their debts to the construction industry, the problem cannot be resolved.”

Where the funds to pay these debts are to come from is a mystery with many local câmaras in a serious financial situation which seems set to get worse (see page 3 of Algarve Resident May 18).

Whilst it is important to remain positive about the future, the realism is setting in and it is obvious that tourism and construction are the two industries which most need immediate financial assistance.

Meanwhile, the National Statistics Institute (INE), has confirmed that the unemployment level in the Algarve is the highest in Portugal since records began.

Overall, INE statistics indicate that there are 819,300 jobless people in Portugal, with the data revealing that a further 48,300 people registered as unemployed during January, February and March of this year. Portugal’s overall unemployment rate now stands at 14.9%.

According to INE figures, the Portuguese region with the second highest unemployment rate is Lisbon with 16.5%, followed by Madeira (16.1%), the Alentejo (15.4%) and the North (15.1%).

The battle in laying blame for these high unemployment figures continues in parliament. Minister for Economy Álvaro Santos Pereira has announced that the government wants to develop and implement a National Employment Plan.

On May 18, the Minister for Economy challenged the Socialist PS party to collaborate in the creation of this plan. He said the PS “practically” led the country into bankruptcy.

Present on the Socialist bench, former Minister of Economy, Vieira da Silva brought attention to the fact that there are now 203,000 more people without work than there were last year and “an unacceptable 20% unemployment rate in the Algarve”.

He continued: “This increase in unemployment is simply the result of your recessive policies.”

Implementation of the National Employment Plan suggested by the Minister of Economy is now awaiting a response. It remains to be seen whether government on all sides recognises the need for urgency and immediate action in this matter. Without it there will be no improvement in the country’s economic performance for the foreseeable future.