Portugal's Construction Sector Reports 2.7% Production Growth in July
Portugal's construction sector maintained its growth trajectory in July, with the national production index rising by 2.7% compared to the same month last year, mirroring the performance recorded in June. The announcement, based on data from the Instituto Nacional de Estatística (INE), confirms a period of sustained expansion for an industry central to the country's economic and real estate landscape.
The statistical findings are derived from the INE's monthly survey on production in construction, a comprehensive analysis that gathers data on hours worked and remuneration from a representative sample of construction and real estate development firms across the country. For the July report, the survey achieved a response rate of 82.9%, ensuring the reliability of the data, which also includes revisions for the preceding two months.
The numerical results show a notable acceleration in the building construction segment, which saw its output increase by 3.7% year-on-year, a rise of 0.3 percentage points from the previous month. In contrast, the civil engineering segment experienced a slight slowdown, with its growth rate moderating from 1.7% to 1.4%. Despite this divergence, both key segments contributed to the overall positive performance of the sector.
The expansion was not limited to production. The employment index for the construction sector also grew by 3.0% year-on-year in July, a rate identical to that of June, signaling a stable and confident labor market capable of supporting the ongoing projects. However, the index for remunerations, while still positive, decelerated by 5.7 percentage points to a 6.5% growth rate. On a month-to-month basis, employment saw a modest 0.5% increase, while wages recorded a 1.7% decline, a movement the INE attributes to typical seasonal adjustments.
An analysis of different market segments reveals that the growth is widespread. The INE's broader report on construction and housing in 2024 highlighted a 'widespread growth' in both the licensing of new homes and the volume of property transactions. This indicates a healthy appetite across the market, from initial planning stages to final sales.
Industry experts view these statistics as a sign of the sector's resilience. According to a construction analyst, 'The consistent growth, especially in the building segment, reflects strong underlying demand from both domestic and international buyers. While civil engineering has slowed slightly, the major infrastructure projects planned for the coming years are expected to provide a significant future boost.'
The government has taken note of the sector's performance. A spokesperson for the Ministry of Infrastructure and Housing stated that the growth aligns with their objectives to increase the housing stock and modernize public infrastructure, suggesting that the policy environment will remain supportive of the industry's expansion.
Looking back, the current figures build upon a trend of positive, albeit fluctuating, growth throughout early 2025. Production grew 2.9% in June and 2.2% in February, demonstrating a consistent upward trend. This contrasts with a brief slowdown in January when year-on-year growth was 2.1%. The data also shows that the real estate and construction sectors were primary drivers in the creation of new companies in Portugal through July 2025, accounting for a significant portion of the 32,422 new businesses registered.
The INE is expected to release its next report covering August's performance in mid-October. Market analysts will be watching closely to see if the building construction segment can maintain its accelerated pace and if the slight slowdown in civil engineering is a temporary adjustment or the beginning of a new trend.
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