“Increased Public Investment in Infrastructure” is Crucial, FEPICOP Warns

27 June 2018

The performance of the construction sector remained positive during the first months of 2018, the Portuguese Construction Industry and Public Works Federation (FEPICOP) concluded, warning, however, of the need for increased public investment.

“The sustained recovery of the construction sector presupposes increased public investment in infrastructure, a crucial factor that is becoming increasingly relevant during public discussions of the National Investment Plan 2030 (PNI 2030),” the federation said in a statement.

According to FEPICOP, the start of the year has been promising, with employment in the construction industry growing by 0.1% in the first quarter over the same period last year, as the of unemployed workers who registered at employment centres fell by 26% year-on-year. At the same time, cement consumption grew by 2.9% in the year to May compared to the first five months of 2017.

“However, the contributions from private investment and public investment to production have turned out to be quite different, with available indicators pointing to a much more positive contribution from the private sector,” the document reads.

Disappointing public works market

The federation says that, in the private sector, the number of licensed residential homes and their construction area and non-residential building area have registered growth rates of over 38% in the first case and 9% in the second. The same is not true of the public works market, which has been “disappointing, with the value of the announcements of public works dropping by 8% in the year to May, while the total number of contracts awarded grew by less than 5% in the same period.”

According to FEPICOP, the number of new housing projects that received licensing in the year to April exceeded 6,100 (+38% y-o-y) and the area under construction amounted to 1.4 million square meters, an increase of 396,000 m2 y-o-y.

The total area licensed for the construction of non-residential buildings grew, by the end of April, 9.2% year-on-year. “The main market for licensed areas in 2018 was industrial buildings, which increased by 13% compared to the same period last year, and accounted for 40% of the total licensed area,” the federation concluded, noting that the area destined for tourist purposes registered a fall of 33%,” accounting for less than 7% of the total licensed area in the year to April 2018.”

Original Story: Idealista

Photo: Gtres

Translation: Richard Turner