The job market has been showing some clear signs of improvement in Portugal – the unemployment rate is at its lowest (10.8%) since 2011. Hoteliers and restaurateurs, enjoying a boost to business thanks to another record-breaking year for tourism, say they have finally been given the opportunity to create more jobs particularly since the sector’s VAT rate dropped in June. But others are not so optimistic and warn the good news is seasonal and could change again once winter comes around. Whichever way you look at it, Portugal’s job market is growing like it hasn’t since the country fell into the spiral of austerity.
According to the latest statistics, Portugal’s unemployment rate stood at 10.8% between March and June this year – the lowest since the first quarter of 2011.
The number of people signed up at employment centres has also dropped. For the first time since 2009, there are fewer than 500,000 people enrolled.
“Any drop in unemployment is obviously positive,” CDS-PP leader and former Minister of Sea and Agriculture Assunção Cristas said this week in Caldas da Rainha.
Still, she warned: “The fact that fewer people are enrolled at employment centres does not mean that they are not unemployed.
“It would be good to know where these people are and what is the current situation regarding emigration, as it certainly wouldn’t have ended with the stepping down of the former government,” Cristas added.
Union leader Arménio Carlos also welcomed the news, but stressed that it may be deceiving.
“There are always more jobs during summer, but that does not address the needs of our country, which are more stable, safe and long-lasting jobs,” the head of CGTP told Lusa news agency.
A brighter outlook is offered by AHRESP, Portugal’s association for the restaurant and hotel industries.
In a statement, the association said that the growing number of tourists in Portugal has given businesses “the confidence” to start hiring more.
Between March and June, the two industries created over 28,500 new jobs. And now that the sectors’ VAT rate has dropped from 23% to 13%, AHRESP believes job creation can continue to grow, especially if business continues into winter, and hotels and restaurants are no longer forced to close.
“This only confirms what AHRESP has always said – if the right measures are taken, the tourism sector has huge potential to generate wealth and jobs,” the association’s spokesperson Ana Jacinto said.
Indeed, Portugal’s statistics institute (INE) confirms that tourism and agriculture are the two sectors that most contributed to the recovery of the job market in the second quarter of 2016.
Algarve, the brightest star
The Algarve region has played a major role in Portugal’s employment recovery.
Besides being the main tourism destination, it is now also the region with the lowest unemployment rate in Portugal (8.1%).
But whether this is just an effect of this year’s incredibly busy summer or whether the boost in employment is here to stay remains to be seen.
Business association União pelo Futuro do Algarve (UFA) spoke of how the Algarve seems to be back on track after a cycle of “darker years”, but warned that the region must focus on becoming a year-long tourism destination if the good news is to continue – and if jobs are to be kept for longer than just the summer season.
According to the Algarve’s tourism chief Desidério Silva, the region is already on the path to becoming a year-round destination.
“Statistics from the first three months of 2016 clearly show that the region’s strategy to become a year-long destination is bearing fruit as demand for low season tourism is already registering significant increases,” he said in a recent statement.
Data shows that 2016 has seen tourist numbers grow every month compared to last year, and the tendency is expected to continue until the end of 2016.
If all goes according to plan, this year will live up to the hype and become the best tourism year ever in the Algarve.
Tourism revenue another record breaker
But the Algarve is not the only success case. Record-breaking figures have been registered all over Portugal.
According to the Bank of Portugal, revenue from the tourism sector has topped €1 billion every month since March. This had never happened before.
“Not even during the Euro 2004 (held in Portugal) did we register this kind of revenue,” president of Turismo de Portugal Luís Araújo told Público newspaper.
In 2004 revenue recorded a maximum of €641 million in June.
He added that Portugal’s promotion strategies are showing clear results and that everyone is working hard to provide a “good experience” to visitors.
“But we mustn’t rest on our laurels. There’s always more that can be done,” the tourism boss concluded.
BY MICHAEL BRUXO [email protected]
Photo: PETER ETCHELLS / SHUTTERSTOCK.COM