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Slower pace of recovery in economic activity
Monthly Economic Survey
Slower pace of recovery in economic activity - October 2020
18 November 2020


In the Euro Area (EA), Gross Domestic Product (GDP) in volume registered a year-on-year rate of change of -4.4% in the third quarter of 2020 (-14.8% in the previous quarter) and a quarter-on-quarter rate of change of +12.6% (-11.8% in the second quarter). In October, there was a slower recovery in the AE economic sentiment indicator and a decrease in the consumer confidence indicator. The prices of raw materials and oil presented rates of -1.5% and -1.6% compared with the previous month, respectively (3.7% and -8.3 in September).
In Portugal, according to the second flash estimate, GDP in volume presented a year-on-year reduction of 5.7% in the third quarter of 2020, after the strong contraction of 16.4% in the previous quarter. Compared to the second quarter of 2020, GDP increased 13.3% in real terms, after decreasing 13.9% in the previous quarter.
In Portugal, not considering three-months moving average (see next section), the information already available reveals a slower pace of recovery in economic activity in September and October. The Consumer confidence indicator increased in October and the economic climate indicator extended the recovery profile observed since May, but still below pre-pandemic levels. Confidence indicators increased in all sectors, Manufacturing Industry, Construction and Public Works, Trade and Services.
The overall amount of national withdrawals, payment of services and purchases at automatic payment terminals carried out on the automatic teller machines of the Multibanco network decreased by 6.3% in October, on year-on-year terms, after decreasing 4.5% in September. The information regarding motor vehicles sales registered rates of change of -12.6%, -15.1% and -15.0% for passenger cars, light commercial vehicles and heavy duty vehicles (-9.4%, -7.2% and -8.6% in September, respectively).
In the third quarter of 2020, the unemployment rate was 7.8%, 2.2 percentage points above the rate observed in the previous quarter (6.1% in the same period of 2019). The labour underutilisation was estimated at 813.7 thousand people (increase by 8.7% comparing with the previous quarter and by 21.9% in year-on-year terms), resulting in an increase of the labour underutilisation rate from 14.0% in the second quarter to 14.9% (12.2% in third quarter of 2019). Total employment presented a year on year decrease of 3.0% (-3.8% in the second quarter), while active population registered a year-on-year decrease of 1.3% (rate of change of -4.5% in the previous quarter). The volume of hours actually worked decreased by 7.2% in year-on-year terms and increased by 17.4% compared to the previous quarter, reflecting the volume of actually worked hours being particularly low in the second quarter of 2020.
The Consumer Price Index (CPI) year-on-year rate of change was -0.1% in October 2020 (the same value as in September), with a -0.3% rate of change in the goods component in the last two months and growth of 0.2% in the services component (null rate of change in August).
In October, the manufacturing price index for manufacturing industry presented a year-on-year rate of change of -4.6% (-4.8% in the previous month). Excluding the energy component, this index has also been registering negative year on year rates of change since September 2019, standing at -1.1% in October (-1.3% in the previous month).

Despite the circumstances determined by the pandemic COVID-19, Statistics Portugal calls for the best collaboration by companies, families and public entities in responding to Statistics Portugal’s data requests. The quality of official statistics, particularly its ability to identify the impacts of the pandemic COVID-19, crucially depends on this collaboration, which Statistics Portugal thanks in advance.

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