Portugal’s Factory Rebound Delivers 5.1% Wage Growth, Export Grants & Power Hike

The Portugal Statistics Office (INE) has reported a 0.3% rise in industrial turnover for 2025, a modest rebound that hints the country’s factories are finally shaking off last year’s slump and could nudge wages, energy bills and job prospects in 2026.

Why This Matters

• Domestic sales jumped 2.1%, cushioning the hit from shrinking exports.

• Exports fell 2.7% in 2025, but new credit lines and grants worth €10 B aim to reverse that slide.

• Average industrial wages rose 5.1%, outpacing inflation and lifting household purchasing power.

• Energy tariffs are set to shift again in 2026, with lower grid fees for big plants but a 1% rise for most homes.

Reading the Numbers

Domestic demand did virtually all the heavy lifting last year. Orders from Portuguese wholesalers and retailers kept assembly lines humming, delivering a 2.7% year-on-year boost in Q4. By contrast, overseas clients trimmed purchases, pulling export turnover down 2.7% for the full year. Even so, December hinted at momentum: stripping out energy, factory receipts climbed 3.4% compared with the same month a year earlier.

Employment remained fragile. Head-counts slipped 0.3% on average, yet pay packets expanded 5.1%, reflecting intense competition for technicians at a time when qualified staff are scarce. That wage pressure could resurface in collective bargaining rounds this spring.

Energy Costs for 2026

Industrial CFOs still rank electricity as the line item with the greatest swing potential. Regulator ERSE foresees a 1% uptick for regulated-market households next year, while large plants on very-high-tension lines should enjoy a 2.9% cut in network charges. The Finance Ministry has earmarked €600 M in the 2026 budget to keep grid fees low and bankroll the shift toward renewables—already supplying 73% of Portugal’s power. For energy-intensive sectors such as chemicals and ceramics, locked-in contracts now look wiser than spot-market punts.

Export Lifelines

Lisbon rolled out the “Programa Reforçar” in April, unlocking €10 B in subsidised loans, non-repayable grants and export-credit guarantees. Highlights include:

• €2.235 B for plant upgrades via Portugal 2030 and the Recovery Plan.

• €1.2 B in cheaper export-insurance premiums targeting new geographies.

• A fresh €3.5 B credit line through the Banco de Fomento aimed squarely at companies with at least 20% export turnover.

The private sector is also stepping up. Sector lobbies project a 5.1% rise in goods exports for 2026, with machinery and food products leading the charge. However, a stronger euro—and slowing demand in Germany and France—could blunt that recovery, so firms are being nudged toward North-American and Gulf markets.

Outlook

Macro forecasts cluster around 2 %-2.3 % GDP growth next year. The central bank expects external demand for Portuguese products to rebound ≈3%, aligning with the broader pick-up in world trade. EU-funded public works and pent-up corporate capex should extend the domestic sales streak, though analysts warn the post-PRR drop-off in 2027 could create a cliff-edge.

What This Means for Residents

• Workers: Bigger payslips in 2025 mean a slightly fatter IRS bill for 2026, but also better mortgage-buffering power as rates creep down.• Job seekers: Net hiring is still sluggish; retraining in automation, industrial maintenance or energy management raises your odds in a tight labour market.• Small suppliers: If you sell equipment or services to factories, watch the Portugal 2030 calls—up to 50% of eligible costs can be grant-financed.• Households: Expect a mild 1 % lift in regulated electricity prices; shopping around in the liberalised market could offset that bump.

For now, domestic demand is pulling the industrial wagon while exports change tyres. Whether 2026 turns into a smooth ride depends on how quickly those new export incentives translate into firm orders—and whether global energy markets stay calm enough for Portugal’s green advantage to shine.