More Inflation and Less Employment? How to Prepare Your Company

Portugal's economic outlook for the coming months looks uncertain. A recent National Statistics Institute (INE) suggests that entrepreneurs are anticipating a further rise in prices in various sectors, combined with a reduction in job creation. Faced with this panorama, companies need to be prepared to face the challenges ahead.

The Expectation of Rising Inflation

The survey carried out by INE covered around 4,750 managers from different sectors, including industry, construction, commerce and services. The majority of participants revealed that they expect a significant increase in prices between now and October. This increase will be particularly felt in manufacturing, construction and trade. In services, which represent a significant part of the Portuguese economy, prices are also expected to rise, albeit more moderately.

This high inflation scenario can severely impact consumers' purchasing power, which in turn can lead to a decrease in demand for goods and services. For companies, rising prices also mean an increase in operating costs, which may require adjustments to sales prices in order to maintain profitability.

Less optimistic job prospects

Alongside the forecast of rising prices, the survey points to a reduction in job creation, especially in the construction and trade sectors. In the construction sector, the indicators show a negative trend, with many entrepreneurs predicting job losses. This situation could worsen if demand for construction services decreases due to rising costs.

On the other hand, the services sector is an exception, with a majority of entrepreneurs predicting a slight increase in job creation. However, it's important to note that even in this sector, prices are expected to rise, which could eventually affect the labour market.

How to Prepare Your Company

Faced with this challenging scenario, it is crucial that companies adopt a proactive approach. The first step is to review prices and profit margins, ensuring that the company remains competitive but also sustainable in the face of rising costs. In addition, rigorous human resources management is essential to avoid abrupt staff cuts, which can jeopardise operations and team morale.

Another important strategy involves diversifying the products and services on offer, exploiting new market opportunities that may arise in response to changing consumer needs. Investing in technology and innovation can also help to optimise processes and reduce operating costs.

More inflation and fewer jobs?

The forecast of higher inflation and lower employment should serve as a wake-up call for companies. Preparation is key to facing this scenario with resilience. Serro & Andrade is here to support your company in adapting to these new economic realities, offering consultancy and accounting solutions tailored to your needs. Prepare yourself for the challenges ahead and keep your company on the right track.

Count on Serro & Andrade

At Serro & Andrade, We offer a full range of consultancy and accounting services to help your company navigate challenging economic times. From strategic planning to financial management and tax optimisation, our team of experts is ready to provide the support you need to ensure that your company not only survives, but thrives. Contact us today to find out how we can help your company face the future with confidence.