Introduction
The Algarve region has seen a remarkable surge in construction, real estate, and transportation over the past decade. This trend mirrors the national growth pattern but uniquely focuses on the Algarve’s thriving sectors.
Rise in New Companies
In the last 10 years, Portugal created approximately 440,000 new companies, with the Algarve playing a significant role in this entrepreneurial boom.
Despite the pandemic-induced slowdown, the momentum quickly resumed, highlighting the region’s resilience and dynamism. According to the 5th edition of the “Entrepreneurship in Portugal” study by Informa D&B, 2023 alone, we have witnessed the birth of nearly 50,000 companies nationwide, an increase of 16,000 from 2013.
Shift in Business Sectors
The configuration of new companies has evolved significantly. While retail dominated a decade ago, it has now fallen to seventh place. In contrast, the transport, real estate, and construction sectors have shown tremendous growth, reflecting a shift in entrepreneurial focus.
Transport Sector
The transport sector’s rise has been particularly noteworthy, climbing from 11th to 2nd place in company formation rankings. This growth is largely driven by the occasional passenger transport in light vehicles, spurred by the 2018 implementation of the TVDE legal regime. In the Algarve, this sector’s new companies have multiplied 11 times over the past decade, contributing significantly to the region’s economic vitality.
Real Estate Sector
Real estate activities in the Algarve have experienced “huge growth,” particularly in buying and selling properties. The creation of new companies in this sector nearly tripled by 2023 compared to a decade earlier. This boom underscores the Algarve’s appeal as a prime location for real estate investment, attracting both domestic and international investors.
This boom underscores the Algarve’s appeal
Construction Sector
The construction sector has also seen substantial growth, with more than double the number of companies created in 2023 than in 2013. Construction and building promotion activities account for 78% of this growth, highlighting the sector’s pivotal role in the Algarve’s economic expansion.
Regional Contributions
While the Greater Lisbon region accounts for 33% of new companies created in 2023, the Algarve, alongside the Setúbal Peninsula, has shown impressive growth. The Algarve’s new transport companies alone have increased 11 times, illustrating the region’s dynamic contribution to Portugal’s overall entrepreneurial landscape.
Characteristics of New Companies
The study reveals that new companies tend to be smaller and have less capital. In 2023, 56% of new companies were single-person enterprises, marking a 3 percentage point increase from 2013. This trend suggests a growing preference for more agile and adaptable business models in the region.
Conclusion
The Algarve’s boom in construction, real estate, and transportation signifies a robust and evolving economic landscape. As new companies continue to emerge and thrive, the region solidifies its position as a key player in Portugal’s entrepreneurial and economic growth. The ongoing development in these sectors promises a vibrant future for the Algarve, attracting investors, entrepreneurs, and residents alike.
