Unemployment is increasing and there are two sectors of concern

Unemployment rates have increased in recent months, reaching a rate of 7.1%. The construction and real estate sectors stand out, while offers rise in public administration

After showing resilience in recovering from the pandemic and with war raging in Ukraine, the labor market is starting to show signs of slowing down. Unemployment in Portugal has risen for three consecutive months, with a focus on the construction and real estate sectors. On the other hand, there are still some job offers in general administration, accommodation and catering.

The number of unemployed persons registered at job centers increased by 4.9% in January compared to the previous month. This was the sixth consecutive month of consecutive growth in unemployment recorded in Portugal (since July 2022) and an absolute increase of 15,081 unemployed, for a total of 322,086. However, there was a decrease of 9.5% year-on-year.

As for the economic activity newly discovered by the unemployed, among the 277,825 registered at the end of January 2023 as candidates for a new job in mainland Portugal alone, 73.1% worked in the “services” sector (with an emphasis on “services”). Real estate, administrative activities and support services”). This was followed by workers in the “secondary” sector (19.3%), where “construction” stands out, and finally the “agricultural” sector (to which 5% of the newly unemployed belong).

The number of unemployed from the real estate sector increased by 4,579 in January, compared to the previous month, while in construction there were 742 unemployed in IEFP centres.

According to data from the National Statistical Institute for the month of December, the Labor costs increased by 6.1% compared to December 2022. Even with the unemployment recorded in this area, it is worth noting the complaints about the shortage of manpower by the construction sectors, which are filled with the use of technology.

Speaking to ECO, AICCOPN leader admits that the Labor shortage was “a major limitation” on the activity, But he replies that “a real digital and technological revolution is underway”. This comes in the form of a “significant investment in innovation”, through new construction processes, use of new materials and construction Off-site and units.

However, data released Wednesday from the National Institute of Statistics also indicates that the unemployment rate rose to 7.1% in January, reaching a maximum of more than two years. This was the third consecutive month of an increase, with the value for January 2023 the highest since November 2020 (it was 7.3%).

The unemployed population and unemployment rate

These estimates do not yet include the distribution by sectors of activity, but they do help to understand that the labor market is showing signs of pressure, as the President of the Republic assumes. He acknowledged that the rally was a “warning sign” on Wednesday, precisely at a time when the international economy was still experiencing a “slow” recovery.

Quarterly data from the National Institute of Statistics that refer to the end of last year show that the number of service professionals fell from 3.56 million in the third quarter to 3.54 million in the fourth quarter.

Millennium BCP also noted, in its February circumstances note, that the slowdown in hiring at the end of last year “was particularly noticeable in the service sector and, in particular, in retail.” They warned that “in the current context of high uncertainty regarding the progress of global demand and the exacerbation of corporate financing costs, indicators of deterioration in the labor market are expected to worsen in 2023.”

Tourism and public administration create job opportunities

Among the sectors that offer jobs are accommodation, restaurants and public administration. This last sector, which also includes educational and health activities, recorded the highest increase in the number of offers compared to January of last year. The real estate sector dominates the offerings, but on a much smaller scale than in the same period last year.

The economic activities that had the greatest expression in job offers received during this month (mainland data), in descending order, were as follows: “real estate, administrative and support service activities” (24.4%), and “accommodation, catering, and similar.” (12.3%) and “public administration, education, health activities and social support (9.8%),” informs the IEFP. It should be remembered that the country has launched many recruitment competitions, not only in the field of health, but also in more technical areas such as information technology , for example, to help implement the Recovery and Resilience Plan.In fact, the need to speed up the implementation of European funds has led to the strengthening of various state bodies, such as This was announced by Minister Mariana Vieira da Silva.

Tourism-related activities, therefore, record many performances, being a sector that has also made many complaints about labor shortages and that has been pressing to speed up the entry of immigrants who can help fill the gaps. The President of the Republic also confirmed, commenting on the unemployment figures released on Wednesday, that tourism is indeed recovering, but there will still be an increase in the level of activity.

The IEFP also notes that “placements taken during January 2023 totaled 7,525 nationwide,” a number that is “lower than that seen in the same period in 2022 (-996; -11.7%) and higher than the previous month ( +2,019; +36.7%).”

Looking at the National Institute of Statistics data, the sector that recorded the highest year-on-year increase in the number of workers in the fourth quarter of last year was industry, construction, energy and water. On the other hand, there was a slight decline in agriculture and a more pronounced deterioration in services. The National Institute of Statistics notes that the increases in the number of workers in the industry, construction, energy and water sector contributed to the annual change in the number of workers (54.7 thousand; 4.7%), specifically in the activities of manufacturing industries (43.7 thousand; 5.5%), as its increase represented 79.9% of the diversity sector.”

Although construction contributes to employment here, the NIS classification also includes industry, which ultimately makes analysis difficult. When we look at the latest detailed data from the IEFP, it appears that many new unemployed people have been registered in this sector.