Building companies in Portugal’s leading tourist destination of the Algarve have been hit the hardest from a slump in the industry as the government cuts back on spending after seeking emergency aid in April.
“It is in the region of the Algarve that the public works sector has shown, throughout 2011, the most worrying behavior,” Portugal’s Association of Public Works and Construction, or AECOPS, said in a statement today.
The number of building licenses in the Algarve fell 56.5 percent in the first nine months of 2011 compared to the previous year, almost twice the national average, according to AECOPS. The outlook for production, employment and prices in the industry is the worst since at least 1989, AECOPS said on Oct. 19.
Portugal’s government is cutting back on spending and raising taxes to comply with a 78 billion-euro ($108 billion) bailout program from the European Union and the International Monetary Fund. The economy is expected to contract 1.6 percent this year and 3 percent in 2012, Finance Minister Vitor Gaspar said on Nov. 21.