The macroeconomic scenario adopted in the 56th Euroconstruct Conference Report (November 2003) confirmed the downward trend anticipated in previous forecasts but emphasized the intensity of the downturn. With a sluggish international economy, the persistent structural problems reduced the Portuguese economy capacity to react to external shocks and played a decisive role in the recession of the Portuguese economy. In the Construction Sector the downward trend of construction output presented in the Budapest Conference (June 2003) was also confirmed along the last six months, with the construction sector facing serious difficulties.

Growth prospects for both new residential construction and civil engineering were revised in order to reflect a deeper than expected economic slowdown and the acute decrease in public investment. The Portuguese Construction Sector is living one of the most severe crises of the last 30 years. In fact we are forecasting an accumulated negative growth of -17.9% in real terms during the 2002/2004 period. The recovery should take place from 2005 onwards, in line with the recovery of the economy but also reflecting the impact of electoral cycles over public investment, as local elections are planned for the end of 2005 and general elections should take place in 2006.

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