The Impact of Economic Austerity Measures on Corporate Performance: The Case of an SME-Dominated Construction Industry

The financial crisis originated in the US, resulting in turbulence in global markets, with spillover effects across the globe that still endure. As Europe was no exception, the most fragile Southern countries have been more negatively impacted. Like Greece, Portugal was forced to ask for external financial aid, from the European Commission-European Commercial Bank-International Monetary Fund (EC-ECB-IMF) “Troika”. This chapter aims to analyse the performance of small and medium enterprises (SMEs) from the civil construction sector, between the years 2010 and 2014, during the time in which the Troika was present in Portugal, imposing a series of reforms and policies to contain the financial crisis. Unsurprisingly, the economic environment experienced by Portugal and the austerity measures adopted had a negative influence on the financial and economic indicators of the sector.