Portugal leads EU employment growth amid productivity concerns

Eurostat data for the second quarter of 2026 shows the European Union's employment rate for those aged 20 to 64 rose to 76.4%. While employment increased in 14 member states, labor market slack remains significant, with 24 million people expressing an unmet need for work or additional hours.

Portugal and Malta recorded the highest quarterly gains in employment, both increasing by 0.6 percentage points. Portugal’s employment rate for the 20-64 age group has reached 80.7%, which is more than 4 points above the EU average.

Despite this labor market strength, Portugal faces an economic paradox. An analysis by the Associação Comercial do Porto suggests the country is stuck in a “low-growth equilibrium,” having averaged only about 1.1% annual growth since 1999. Researchers attribute this discrepancy between high employment and slow economic progress to low productivity levels.