Overall construction activity

After the unprecedented drop of 8,3% suffered by GDP in 2020, Portuguese economy recovered in the following two years, growing 5,5% in 2021 and 6,7% in 2022. According to forecasts by Banco de Portugal, the economy is expected to continue to grow in the coming years, albeit moderately, with growth of 1,5% in 2023, 2,0% in 2024 and 1,9% in 2025. 

According to the National Institute of Statistics (INE), even with the strong rise in the prices of materials and services and the rising interest rates practiced in the various markets, all Portugal´s GDP components recorded positive performances, with emphasis for the strong annual growth of exports (+16,7%) compared to an annual increase of imports of (+11,0%), a differential favourable to the GDP growth.

Gross Fixed Capital Formation (GFCF) grew 2,7% mainly due to a strong evolution in the investment in machinery and transport material (+5,5%) given that the behaviour of construction investment was very modest (+0,8%).

In line with positive GDP developments, the labour market experienced favourable developments throughout 2022, with growth in total employment (+2,0%) and a reduction in the unemployment rate from 6,6% to 6,0% from 2021 to 2022.

Regarding prices changes, one of the problems that was most felt throughout the year, both among families and companies, there was a sharp increase in 2022, with the variation in the consumer price index standing at 7,8% (after +1,3% in 2021).Following FEPICOP´s estimates, construction sector production grew, in real terms, 3,4% in 2022.After this year, the accumulated growth of the sector's global production in the period 2017-2022 exceeds 28% in real terms, insufficient, even so, to cancel out the 59% retraction verified in the global value of construction production during the period of recession that began in 2002 and lasted until 2016.

This sector production recovery has been accompanied by an increase in the number of construction workers, which started from 290 000, on average, in 2016, to 316 100 workers, on average, in 2022. Facing 2021, the construction employment grew 3,5%, above the total employment of the economy, which increased 2,0%. Consequently, there was a reduction in the unemployment from the construction sector, -9,1% (-12,0% recorded for total unemployment).

According to the data provided by the Institute of Employment and Vocational Training (IEFP), 18 665 unemployed people from construction were registered in the employment centres in December, representing 6,7% of the total number of unemployed registered (278 000). 

The total employment in the economy is expected to stagnate in 2023 and to grow 0,2% in 2024, while the unemployment rate is expected to maintain the same value (5,9%) along the period 2022/2024.

Construction sector production is expected to increase by 3,4% in 2023, with the building construction segment growing by 2,0% and the civil engineering segment increasing by 5,0%.


In 2022, the volume of production in the residential segment grew around 3,7%, in real terms.

During the year, demand for residential real estate remained high, both domestically and abroad, which was reflected in a high volume of real estate transactions during the year. According to INE data, until the end of September 2022, 129 4 000 dwellings were transacted (+8,0% year-on-year), for a total amount of €24,4 billion, a value 23% higher to that observed in the same period of 2021. 

The major share of transactions (82%) refers to already-used houses, with their number increasing by 6,4% compared to the same period of 2021. On the other hand, new houses transactions recorded a sharp increase of 16% in the number of transactions, facing the year before. 

The production of new housing construction segment took the most dynamic role within the residential segment, with a real growth of 4,2% facing previous year, while repair & maintenance works increased at a rate close to 3,0% in real terms.

According to INE data, the number of new housing permits during the year 2022 reached 30 000, reflecting an increase of 5,1% compared to the previous year, while the completion of new housing grew 3,5% (19 742).

For 2023, forecasts point to a positive evolution of +3,0% in residential construction production, the lowest growth of the last 8 years. The main reason for this more moderate growth comes from the expected upward trend in both interest rates and material costs along the year. 

Both components of this segment are expected to growth along 2023, with the new construction component growing more intensively than the maintenance/rehabilitation work component (+3,4% and +2,5%, respectively).

Non-residential construction

In 2022, non-residential buildings segment production increased by 1,0% (+0,9% the year before).

After two years in which the performance of the private component was unfavourable, in 2022 there was a recovery of the area licensed for new non-residential buildings construction. Thus, along 2022, 2,9 million m2 were approved, which reflected an increase of 14% compared to the previous year.

The building permits for the construction of buildings for commercial purposes were those that recorded the most positive development in 2022, +75% in homologous terms, followed by the approved area for the construction of buildings to agriculture: +36%. The area approved for industrial buildings increased by 15%, remaining as the main destination of the approved area: 32% of the total.

Concerning the evolution of the public component of this construction segment, it is important to stress the favourable evolution of public investment in 2022, which recorded an annual growth rate of 6,1%, according to the data provided by the Ministry of Finance.  In 2022, the overall amount of this investment reached EUR 6,7 billion, with a significant part of this investment being materialized in construction works. 

Non-residential construction production is expected to increase by 0,7% in volume in 2023, a more moderate pace than the evolution estimated for the previous year. Nevertheless, both components of this segment are expected to develop positively along 2023.

GDP 2022




Total investment in construction in 2022


Civil engineering

In 2022, among the various segments of the construction sector, civil engineering should have recorded the strongest growth (+4,5% in volume, compared to 2021), assuming the main contribution to the positive development that the construction sector revealed throughout the year.

According to the data of the “Public Market Observer”, the public works market registered a negative performance in 2022 as had already happened in 2021. The number of bids decreased by 16,0% and the value by 3,3%, while the number of signed contracts decreased by 32,5% and the value by 29,3% during the year.

The expected trend for the civil engineering segment production in 2023 is positive, reflecting a strengthening of the year-on-year growth rate of this component, from an estimated +4,5% for 2022 to a projected increase of +5,0% in 2023. With this growth, the production value of this segment is expected to correspond to about 48,5% of the total production planned for the sector in 2023.

This optimistic forecast is based both on the expectation of the weight of public investment in GDP growth (from 2,6% in 2022 to 3,0% in 2023, according to the European Commission's forecasts) and on the increase in the use of EU funding that Portugal receives from various EU Fund Programmes (mainly Portugal 2030 and PRR – Recovery and Resilience Programme).

Prices of construction materials

Starting in 2021 and extending into 2022, there was a sharp increase in the price of most construction materials in Portugal. The estimates for average annual variations in construction costs (including labour, materials and equipment used in construction) pointed to +9,7% in 2021 and +13,3% in 2022, with the materials price increases assuming the main contribution to the total change in construction costs.

Per cent variation of investment in real terms of previous year


Per cent variation of investment in real terms of previous year