Businesses in Portugal hope to increase their exports by 1.1% in 2023 compared to last year, predominantly thanks to a boost in sales to EU markets.

This is according to the results of a survey published on Tuesday by the National Statistics Institute (INE).

“Companies expect a nominal increase of 1.1% in their exports of goods in 2023, compared to the previous year,” says the INE report, specifying that, “according to companies’ expectations, this increase is sustained by the forecast increase in exports to intra-EU markets (+1.7%), given that they foresee a decrease of 0.3% for extra-EU countries.”

In regard to Broad Economic Categories (GCE), ‘machinery, other capital goods (except transport equipment) and their accessories’ have the largest forecast rise in exports this year at 8.2%, with ‘industrial supplies not elsewhere specified’ are forecast to decline by 1.1%.

The National Statistics Institute added that companies’ expectations for goods exports in 2023 “differ in the various sectors of activity, with, in some cases, increases expected as a result of price increases and, in others, the reduction resulting from the forecast contraction in demand and scheduled stoppages or discontinuation of production lines, in response to market conditions, disruptions in global value chains and increases in input costs.

“Uncertainty about price developments is pointed out by companies as a factor that significantly influences their forecasts for exports of goods for 2023,” it continued.

Noting that “the results of the Survey on Prospective Exports of Goods (IPEB), insofar as they are based on growth prospects, should be seen as indicating trends conditional on the information available to companies during the response period,” it added that “the current climate of uncertainty, mirrored in the results of the economic climate indicator recently published by INE, well reflects the difficulty shown by companies in drawing up a forecast for the evolution of exports of goods for the year 2023 as a whole.

“Thus, companies’ prospects for their exports of goods for 2023 may also reflect, to a high degree, uncertainty about developments in the international environment, with unexpected impacts on demand and prices. The opinions of companies, especially in the manufacturing industry, regarding overall demand and in particular external demand (order books), considering companies with production geared towards the external market, showed values of around -15 percentage points throughout the second half of 2022, and companies do not expect improvements for the beginning of 2023,” the findings state.

A total of 3,293 companies took part in the poll, with a 91% response rate, corresponding to 96% of the exported value of the companies in the sample.