Lisbon, Sept. 22, 2026 (Lusa) - Portugal is close to full employment, but the economy's productivity has yet to catch up with the European Union and remains below 2000 levels, according to a study carried out by the Business Roundtable Portugal Association.
According to the «Comparar para Crescer» [Compare to Grow] Snapshot, labour productivity per hour worked, measured in purchasing power parity, stood at just 66.9% of the EU average, below the level recorded in 2000 (67.6%).
«In relative terms, Portugal's position in the ranking of productivity per hour worked has deteriorated markedly since 2000, falling from 17th to 24th place amongst the 27 member states of the European Union,» the report states.
This is despite the Portuguese economy having recorded record employment figures, with over five million people in work, representing an employment rate of 79.6%, close to full employment and above the European Union average (76.1%).
This study identifies four main barriers to productivity: «chronic under-investment by both the public and private sectors; sectors with low value added and low wages dominating job creation; the predominance of small-scale firms in the business sector; and high context costs».
To overcome these constraints, the association recommends solutions that involve increasing productive investment «through a regulatory framework that makes licensing processes more stable and predictable», as well as «promoting business growth by removing obstacles and improving the conditions for their capitalisation».
The association also advocates the need to «value labour», by focusing on «promoting skilled jobs in technology sectors and easing the tax treatment of wage progression».
According to the calculations in this analysis, between 2011 and 2024, across 12 sectors of economic activity, more than 680,000 jobs were created, with an average annual gross value added (GVA) of €40,400.
«Over 60% of the jobs created have an average GVA of just €31,700, which clearly hinders productivity growth,» it concludes.
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