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According to figures releases in August 2000, unemployment in Portugal fell to its lowest level for nine years in the second quarter of the year. Trade unions responded by pointing out the increase in precarious work and the problem of low wages. Furthermore, a number of parties have called attention to low levels of productivity and skills and to persistent gender inequalities.
The National Statistics Institute (Instituto Nacional de Estatística, INE) published the results of its latest employment survey in summer 2000. According to the survey, the economically active population grew by 2.2% from the first quarter of 1998 to the first quarter of 2000. Since Portugal's total population grew by only 0.4% during this two-year period, the economic activity rate rose from an average of 50.1% in the first quarter of 1998 to 51% (58% for men, 45% for women) in the first half period of 2000. The increase in the active population is essentially attributable to increased employment, while unemployment fell over this period. Thus, the total number of persons in employment is estimated to have grown by 3.4% over the two-year period, while the number of unemployed people fell by some 20% and the unemployment rate from an average 5.2% to 4.1%. The unemployment rate reached 3.8% (2.9% for men, 4.8% for women) in the second quarter of 2000 - the lowest figure for nine years - a drop of 0.6% in relation to the previous quarter.
Overall, the number of jobs grew by 1.5% over the year to the second quarter of 2000. INE highlights the sharp 12% rise in the building sector and the 3.8% rise in agriculture, forestry and fishing. However, employment in the services sector fell by 0.6%. The figures from INE thus support forecasts made by hotels and building employers' associations, as well as a number of economists, that the rise in activity in these sectors, combined with the shortfall in the labour market, would be a major stumbling block to economic growth, especially since the shortfall has not been offset by appreciable increases in productivity. The Bank of Portugal (Banco de Portugal) has stated that the Portuguese situation is currently marked by a very low rate of unemployment but little growth in productivity, a key factor in sustaining economic growth.
The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) and the General Workers' Union (União Geral de Trabalhadores, UGT) have drawn attention to the negative side of the INE figures, which, in their estimation, do not fully reflect reality. The two union confederations state that the decrease in the unemployment rate is largely attributable to precarious work and the "parallel economy". They point out the growing number of fixed-term contracts and the high concentration of women in low-skilled sectors.
The current labour market situation has led Ferro Rodrigues, the Minister of Labour and Solidarity, to establish job quality and skills as one of his priorities, stating that this is the only way to promote "the sustainability of low unemployment rates."
Since serious structural obstacles to employment growth are predicted for the future, the European Commission has asked that greater effort be put into fully achieving EU employment goals through the European employment strategy (EU9909187F). Portugal has therefore been asked to invest in a number of areas as part of its National Action Plan for employment: more worker access to education and life-long training; reduction of administrative burdens on companies; creation of improved conditions for entrepreneurial initiatives; increased efforts to combat discrimination against female workers; further efforts to prevent early school-leaving; and more effort in exploiting the potential of the services sector.