In September 2023

Regional economy continued to accelerate

The Regional Economic Activity Indicator (RIEA) revealed that in September 2023, regional economic activity grew compared to the previous month, marking three consecutive months of acceleration.

As previously mentioned, the primary purpose of the RIEA, as indicated by the DREM in its initial release in October 2017, is to "signal the behaviour of economic activity, particularly with regard to its direction and magnitude of fluctuations: whether it is in a positive or negative trend, accelerations, decelerations, and identifying turning points." Therefore, its quantitative value assumes secondary importance, as it is not intended to substitute for the actual change of the Gross Domestic Product, which is determined through a broader and more comprehensive set of statistical data, even though a strong correlation exists between the two variables.

Monthly Economic Survey – The economic situation of the Autonomous Region of Madeira in September 2023 from 6 topics

The DREM (Regional Directorate of Statistics of Madeira) provides a brief analysis of the main short-term indicators divided by theme.

Economic Activity

As mentioned earlier, regional economic activity in September 2023 continued its positive growth trajectory, showing signs of acceleration compared to the previous month. The performance of the tourism sector contributed to economic growth, as overnight stays (excluding local accommodation with fewer than 10 beds) increased by 1.8% this month, up from 0.1% recorded in the previous August. Total revenues in tourist accommodation recorded an increase of 15.4% (13.4% in August).

Electricity distribution, an indicator usually associated with the evolution of economic activity, grew by 3.5% in September 2023, slightly below the 3.8% increase observed in the previous month. Diesel consumption increased by 0.7%, following a 0.5% decline in August.

Analysing the ratio between newly formed and dissolved companies, it is observed that in September 2023, 1.2 new companies were created for every company dissolved in the region, a ratio lower than the previous month (1.7).

Private Consumption

Although a context like the current one, with the growth of domestic tourists, limits this analysis, one of the indicators revealing the evolution of private consumption refers to SIBS network operations with cards issued by national banks. Observing the aggregate amounts of withdrawals at ATMs and purchases through automatic payment terminals with national cards, there was a growth of 8.6% in September 2023, reversing the deceleration that had been observed since the previous April.

Gasoline released for consumption slowed slightly, with the year-on-year change settling at +14.5% in September 2023, compared to +14.9% in the previous August.

Consumer loans granted to households and non-profit institutions serving households decreased by 16.3% in September 2023, contrasting with the 2.0% increase in the previous month, while the sale of new light passenger vehicles grew by 14.9% (-8.6% in the previous month).

Investment

In this domain, indicators are divided into two groups: those with a positive trend, such as sales of light commercial vehicles (+16.7%; +112.5% in the previous August), housing bank appraisal (+23.0%; +20.4% in the previous month), building permits (+12.1%; +2.1% in the previous month), and cement sales (+4.0%; -3.8% in the last August) and those in decline, such as loans granted to households for housing (-0.9% in September; the same in the previous August) and the balance of loans granted to non-financial corporations (-5.8%; -2.5% in August 2023).

External Demand

Although foreign trade represents only a small fraction of the overall trade conducted by the region (most of which is with the mainland), it is relevant to note that both exports (-27.2%) and imports of goods (-49.3%) decreased. However, the movement of goods in ports (+3.9%; +3.8% in the previous month), which is a more comprehensive indicator regarding the dynamics of foreign trade, increased. In other indicators, in September 2023, it is observed that the acceleration in passenger movement at airports (+8.4%; +7.0% in the previous August) is in line with the evolution of total withdrawals at ATMs and purchases through automatic payment terminals with international cards (+18.9%; +15.5% in the previous month).

Labour Market

Data from employment agencies in the country and the region show that in September 2023, there were reductions in job offers (-25.3%), job applications (-14.7%), and also in registered unemployed persons throughout the month (-14.2%).

Prices

In September 2023, the year-on-year inflation rate, which stood at +3.9%, slightly accelerated compared to the previous month (+3.8%), with it being higher in goods (+3.9%) than in services (+3.6%). The underlying inflation rate (excluding unprocessed food and energy products) was +3.6%.

For more information, please visit:

• RIEA - In Focus (Portuguese only)

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