Portuguese industry sold 6.5% more in June. Its payroll shrank
Turnover rose 6.5% year on year, driven by the domestic market (up 9.0%) and energy (up 11.6%). In the same month industrial employment fell 0.7% while wages paid rose 5.6%.
Portuguese factories took more money in June. The industry turnover index rose 6.5% on the same month last year, according to the series INE publishes for industrial business indices, and across the whole second quarter sales were up 7.5%, against a mere 1.4% in the previous quarter.
The small print matters here. A good chunk of that rise is price rather than volume — the statistics office itself attributes the quarterly acceleration largely to prices. Strip out energy and the 6.5% becomes 5.1%.
Who did the pulling
The home market did. Sales destined for Portugal grew 9.0% and contributed 5.7 percentage points of the total change, which is to say nearly all of it. Foreign markets slowed by 2.5 points to growth of 2.1%, worth just 0.8 points.
Intermediate goods and energy dominate by grouping, contributing 2.9 and 2.5 percentage points on growth of 9.0% and 11.6%. Capital goods rose 3.6%; consumer goods managed only 1.6%. That last figure is the telling one. Households are holding back; factories buying from other factories are not.
The number nobody puts in the headline
In the very month turnover rose 6.5%, industrial employment fell 0.7% and hours worked slipped 0.3%. Wages paid, meanwhile, climbed 5.6%, a full point faster than in May.
Fewer people, working slightly fewer hours, being paid more, in a sector billing more. That can be productivity improving. It can be automation. It can simply be inflation passing into prices and pay at the same time. One month settles none of it.
The shape of it fits the summer, though. It was the domestic market that propped up Portuguese tourism in June as foreign guest nights fell. Two unrelated datasets telling one story: the people currently carrying this economy live here.
By Beatriz Mota
Image: Diego Delso / Wikimedia Commons (CC BY-SA 4.0)
