purchasing power
Portugal pursues ambitious changes under Antonio Costa, positioning the country as a hub for vocational training and a benchmark for Europe. The government talks of building a bridge from primary education to practical, modern skills for a large segment of the workforce, aiming to channel roughly 200,000 workers into stronger vocational pathways over time. This shift is massive not only because of its scale but also since the sector has long faced challenges in attracting and keeping staff. Wages in the accommodation and restaurant sectors hover around 770 euros monthly in the northern regions. The CCDRN, Coordinación e Desenvolvimento Regional do Norte, operates as an autonomous body under Lisbon, illustrating how bargaining power and purchasing power have weakened across many professions in Portugal. Recent changes in collective bargaining show some restoration of influence, though the impact on wages remains uneven and slow to reverse.
In Galicia, unions and employers have worked on reforming contracts, yielding more generous terms in several agreements. Nearly twenty deals finalized in the past semester across Pontevedra and Ourense cover more than 70,000 workers and reflect a renewed emphasis on wage review clauses.
The most recent contract registrations in Regcon include a marble and stone company in Pontevedra employing 812 people. The agreement runs for three years, with a 3 percent rise in the first two years and 2.75 percent in the last year. It also features an inflation shield and a review clause that triggers salary reassessments in 2025 if the consumer price index grows by more than 10 percent between 2022 and 2024. These adjustments are non-retroactive and do not permit borrowing. A similar approach applies to contracts for 800 workers in the auctioneering and sawmilling sector, with a 4 percent salary rise over two years. If the CPI surpasses agreed thresholds, wages are reviewed to account for the surplus effective January 1.
Across most sectors, new contracts this year will be based on a baseline 3 percent salary increase, though certain industries display different protections and adjustments. In the cases of Atunlo O Grove and Metalships & Docks, distinct conditions apply, but the overarching trend centers on modest increases tied to inflation expectations. The general mood is cautious optimism about incremental gains in purchasing power.
purchasing power
Even with these salary improvements, the broader decline in purchasing power persists as inflation remains a challenge. Yet Galicia has seen inflation ease to a lower annual rate, offering some relief in consumer costs. The furniture trade agreement in Pontevedra illustrates this gradual recovery: a deal revived after a lull in 2019 and 2020, when payrolls lagged behind the inter-professional minimum wage and there were no raises. This year’s agreement brings a 7.62 percent payroll uplift until workers reach a monthly salary of 1,028 euros.
Approximately 25,000 construction workers are covered by another contract that includes a 4.75 percent wage increase with a mechanism to adjust if the CPI deviates by more than 3 points by year end. Analysts from the Funcas foundation project the inflation rate to settle around five percent by December and then ease in the following year. If inflation deviates significantly, Pontevedra’s metalworkers gain added protection through a review clause that could boost wages by as much as five percent, a central feature of Galicia’s most significant sectoral agreement in 2023-2024. The agreement has drawn attention due to potential disruptions from strikes as negotiations remain sensitive to market volatility.
Other notable accords involve Gefco Spain and various carpentry and metallurgical groups in Ribeira and Ourense. These contracts include wage guarantees or updates aligned with CPI trends. In A Coruña, firms with more than 35,600 employees apply a 13.5 percent salary increase spanning 2022 to 2025, guarded by a review clause that allows salary tables, permanence bonuses, and transportation allowances to rise if CPI outpaces the increases. A two-year revaluation of 8.5 percent by Kiwi Atlántico and a 7.5 percent ceiling in the Freire Shipyard contract illustrate the range of responses to inflationary pressure.
The latest salary cost survey for the first quarter shows Galicia’s average regular salary around 1,710 euros, with the industry paying about 1,926 euros on average—the best paid sector in the region. Yet many companies still face retention and training challenges for talent in industrial roles across Portugal, underscoring how wage dynamics and incentives influence workforce stability.