The D&B new business barometer has swung the wrong way with fewer new businesses opening and an increase in company closures.
Between January and June this year, for every company that closed, three were opened. This might look like good news but the number of new business openings has dropped 4% compared to the same six month period in 2015 with company closures increasing 1.2%.
According to D&B, "this indicator does not show a stable trend" but it does mark a reversal of the good performance in 2015 when new businesses openings gave hope to the previous coalition government that the dark days of recession and austerity were clearing and Portugal’s entrepreneurs again were active.
The six-monthly D&B barometer, which looks at company start-ups, closures, insolvencies and the business sector’s payment periods, reported that in the six months to the end of June this year, 20,377 new businesses were founded and 6,708 were closed, a daily average of 147 opening and 66 closures.
The business sector analysis also shows a reversal in the 2015 trend with accommodation, catering and construction sectors growing and services, retail, manufacturing and wholesaling registering a decline.
But there is good news for the real estate sector with optimism over property market trends giving rise to 31% more estate agencies being established to the end of June this year than in the same period last year.
In relation to insolvencies, these fell in "almost all" sectors with a total reduction of 24% when compared with the first half of 2015.
The cost of setting up a new business when added to advanced corporation tax payments and directors’ income tax and social security payments, that are demanded even when drawing little or zero salary, all continue to act as a significant deterrent to many would-be business people.
The grey market continues to thrive, especially in the local lettings sector where 80% of properties remain unregistered, most owners then failing to declare the income earned.
