NORTE - Economy
Export orientation of traditional industry
The production structure of the Norte region is largely based on traditional sectors which are often labour-intensive, low-productivity and strongly export-oriented. Despite some modernisation in recent years, however, competitiveness is still largely dependent on low labour costs. Some 35% of firms based in the Norte region are in the distributive trades, 26% in manufacturing, 9% in construction, 8% in hotels and catering and 20% in the tertiary sector. Only 2% of firms in the Norte region are in the primary sector. In terms of Gross Value Added, the secondary sector has a higher share in the region (38%) than for the country as a whole (29%) in 2000. At the opposite, the primary and the tertiary sectors are respectively comparable with the figures for Portugal as a whole, with 3% and 59% against national averages of 3% and 68%. This under-representation of primary activities is due simply to the fact that farming in the region is traditionally a family affair and few holdings are run by agricultural companies. Four-fifths of manufacturing firms are in textiles, clothing and leather; the furniture branch, the timber, cork and papermaking pulp branch and the metals industry each account for a tenth, and the food and beverages industry for 9%. Most of them are small companies with an average number of employees per firm of 14.
A high proportion of industrial output goes for export. About two-fifths of Portugal's exports come from firms in the Norte region, which also accounts for about a third of the country's imports. The textiles, clothing and leather industries account for 60% of the region's exports and machinery and electrical equipment for roughly an eighth.
Overall, the average level of earnings in the Norte region is the lowest in Portugal. This situation inevitably encourages labour-intensive manufacturing processes which, together with a specialisation pattern which favours some industrial sectors with low value added, results in relatively low productivity. In 1999, the level of productivity in the region was 15% under the national average. The efforts being made to modernise industry are directed chiefly at renovating equipment and introducing new products and/or markets, investment by industry in research and development is still in its infancy, with a few successful exceptions.
Declining agriculture, low industrial productivity and restructuring in the distributive trades
Agriculture in the Norte region has suffered in recent years from radical changes in agricultural markets, despite the unquestionable quality of certain regional products such as meat and wine. The number of farm holdings fell by some 9.1% between 1990 and 1997 while the utilised agricultural area shrank by 7%. It is usually the smallest holdings which fail to survive the changes. Despite this, three quarters of all holdings have fewer than five hectares of land. Most farming is done on an own-account basis, without recourse to bank loans or organised accounting, and with intensive use of family labour. The farmers of today are a relatively elderly section of the population and their income is derived chiefly from sources other than farming. The leading farm products are cereals, maize, potatoes and wine.
Manufacturing is heavily concentrated in the western half of the region, as are certain branches of activity such as textiles and clothing, footwear, furniture and some metals production. Containment of labour costs has enabled the problem of low productivity to be side-stepped and sustained a marked level of exports. The difficulties of maintaining this pattern of productivity are likely to grow, however, unless production processes are redirected towards other competitive advantages than cheap labour.
The distributive trades are the leading activity in the services sector in terms of GVA created, and are undergoing a major restructuring phase reflected largely in the growth of out-of-town hypermarkets and shopping centres. Financial activities and business services show a higher geographical concentration than does manufacturing.
Strong sectoral and geographical concentration of the biggest firms
The economic fabric of the Norte region is dominated by small firms. The biggest firms are also highly concentrated, above all at geographical level but also in sectoral terms.
Some 61% of firms in the Norte region employ fewer than five people, 89% fewer than 20 and 95% fewer than 40. Only 100 firms have 500 or more employees, equivalent to 0.1% of the total. It must be borne in mind, however, that these figures refer only to companies based in the Norte region and exclude industrial or commercial establishments in the Norte region which belong to firms based outside the region.
Small units are particularly common in the tertiary sector (where 96% of firms have fewer than 20 workers) and in the primary sector (90%). A quarter of companies in the secondary sector employ 20 or more persons; this is therefore the sector in which most large companies in the Norte region are concentrated. Of the 100 companies in the Norte region with more than 500 employees, 31 are in the textile and/or clothing industries and 13 in the leather and footwear branch. Of those same 100 companies in the Norte region with over 500 employees, 52 are located in the Grande Porto zone, and a further 27 in the Ave sub-region. Neither of the two inland sub-regions (Douro and Alto Trás-os-Montes) appears on this list of the 100 leading employers. Lastly, of the 100 biggest companies in the North (by number of employees), four are chiefly publicly-owned and 22 owned by foreign entities.
Under-exploited tourism potential
The Norte region has two distinct tourism zones: the western half is more or less identical to the area known generically as Costa Verde, whose main attraction for tourists is the coastal strip, above all its beaches; the rest of the Norte region is fairly mountainous, offering good natural conditions for rural tourism, but it is little exploited for the purpose. Overall, the Norte is not one of Portugal's best-developed tourist attractions, despite its natural potential.
Some four-fifths of the available hotel accommodation is concentrated in the Costa Verde and the North region is chosen by 13% of guests accommodated in the country. Turnover in the Norte region's hotels is highest in August and September and relatively sparse in January and February. Two-thirds of the guests are usually resident in Portugal. Trips are often non-touristic, so that the average length of stay is very short. The average occupancy rate is also fairly low (29.6% in 2001).
Camp sites are an important adjunct to tourist accommodation in the Norte region. The number of campers frequenting the region's camp sites in 1995 was roughly a quarter of the number of hotel guests. The average length of stay at a camp site (3.2 days) is inevitably greater than that of hotel stays, since camping holidays are always motivated by tourism.
Major commercial port activity and a dwindling fishing fleet
The Norte region has two major commercial ports: Viana do Castelo and above all Leixões. The latter has one of Portugal's biggest freight docks, similar in size to that of Lisboa and appreciably exceeded only by Sines (which handles virtually only petroleum, petroleum derivatives and mineral fuels).
Roughly 75-80% of Portugal's international goods traffic (incoming and outgoing goods) is shipped by sea, and roughly a quarter of international movements of goods by sea (incoming and outgoing) pass through the ports of the Norte region. The cargo throughout of Leixões (situated in Grande Porto) is roughly 27 times that of Viana do Castelo (in Minho-Lima).
The Norte region is also the site of substantial fishing activity, concentrated primarily in the ports mentioned above and in Póvoa de Varzim (in Grande Porto). About a fifth of Portugal's total catch is landed in the Norte region. Two aspects of the fishing fleet which deserve mention are its dwindling size and its current modernisation. From 1991 to 1996 the number of fishing boats registered in the Norte region fell by about 15%. This trend is due entirely to a fall in non-motorised vessels, whose numbers in 1996 were only a quarter of those recorded in 1991. Over 92% of the North fishing fleet was motorised by 1996, as compared with only about 75% in 1991.
The decline of the fishing fleet can also be seen in the number of registered fishermen, which fell by just over 25% during the five years in question, and in the quantities of fish landed in the ports, down by 23%.
Transport
The transport network in 2001 was represented by 385 kilometres of motorways and 527.4 km of railways (only 17% of them being electrified).
Maritime goods transport has slightly increased between 1990 and 2001, whereas the opposite trend appears at the national level. In 2001, the maritime transport in the region was responsible of the carriage of 13.7 million tonnes of goods. The air transport has followed an increasing trend during the 1990?s both in terms of passengers and in terms of freight transport. In 2001, there were more than 36 million tonnes and 2.7 million passengers carried by air in the airports of the region.
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