Urban Rehabilitation Activity in Portugal Registers Positive Growth in July
The urban rehabilitation segment of Portugal's construction sector began the second half of the year on a positive trajectory, according to a report issued this Friday by the Association of Industrialists of Civil Construction and Public Works (AICCOPN). The latest survey data for July indicates growth in activity, a significant increase in order backlogs, and a rise in municipal licensing, painting a picture of a resilient and expanding market.
The AICCOPN survey, which polls companies operating within the urban rehabilitation space, revealed that the activity level index experienced a year-on-year increase of 0.5% in July. The association noted this as "confirming a favorable sign of production growth." This sustained activity is supported by a strengthening demand pipeline, as the order backlog index rose by a substantial 8.4% in homologous terms. AICCOPN interprets this as a consolidation of the trend of strengthening demand in this market segment.
As a result of the growing order books, the average secured work time for companies has also increased. The 'contracted production' indicator, which measures the estimated time of work guaranteed at a normal pace of execution, reached 9.7 months. This figure is notably higher than the 8.7 months recorded in July 2024, providing construction firms with a more stable operational outlook.
The positive momentum is also reflected in the administrative data for project approvals. According to AICCOPN, municipal licensing for urban rehabilitation works showed significant growth in the first half of the year. By the end of June, a total of 3,349 licenses had been issued, which represents a year-on-year increase of 9.7%. This growth was largely driven by the housing sector.
The report highlights that the evolution in licensing "results, above all, from the 16.6% increase verified in the residential buildings segment, resulting in 2,036 licenses issued." This strong performance in residential rehabilitation points to continued investment in upgrading Portugal's housing stock, likely fueled by both domestic demand and interest from international buyers and investors. The focus on renovating existing buildings is a key component of the strategy to address housing shortages in dense urban areas.
AICCOPN added a technical note clarifying that the licensing statistics are based exclusively on interventions that are subject to prior municipal control. Therefore, the data does not encompass the full spectrum of rehabilitation activity nationwide, as smaller projects exempt from this requirement are not included. This suggests that the overall market activity could be even more extensive than the official figures indicate. The consistent positive indicators across activity, orders, and licensing signal continued confidence and investment in the Portuguese urban renewal market.
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