Record closures

In a reflection of the difficult economic climate, last year saw the closure of almost 3,000 Portuguese businesses, a huge increase of 42.4 per cent on the previous year. Manufacturing businesses were the worst affected, with 279 petitioning for bankruptcy in 2003. By district, Porto was the worst affected area, recording 303 bankruptcies last year, followed by Lisbon, Braga, Aveiro and Leiria. In spite of the fact that the number of personal bankruptcies dropped by 5.9 per cent – to 1,269 -the number of businesses petitioning for bankruptcy or declaring bankruptcy rose by a massive 140 per cent to 1,511.

Worst is over

Talking to the Resident, Chris Barton from the British and Portuguese Chamber of Commerce revealed that although last year had been difficult, he believed the tide was turning. “Last year we had a small number of resignations, but it was only a marginal increase and it was not as bad as we expected. We even did reasonably well in recruiting new members from the Algarve. What I did notice was an increase in the number of enquiries about debt collection in the Algarve. People continue to be paid slowly and we receive many complaints from people not paying bills, some of the problems stemming, naturally, from seasonal variations in the tourist sector and the fact that there is little money out of season.”

Although economists and businessmen alike are predicting a challenging year ahead, Barton claims he is more optimistic than he would have been a year ago, commenting: “I think the worst is over and people will become more upbeat this year.” Aníbal Moreno, from the Almancil Business Association (AEA), believes property tax reform is adding to the general climate of uncertainty in the region. Moreno is keenly aware of a difficult year ahead for many of the region’s businesses. His strategy for 2004 is simple but effective – professionalism is the keyword to ensure the survival of businesses in the Algarve: “Every company must pay attention to the market and cannot afford to ignore new competition and the new requests and needs of clients. Staff need to permanently update their skills, deal easily with the new technologies and be able to respond to customers with sympathy.”