In October 2023

Regional Economy Accelerates for the Fourth Consecutive Month

The Regional Indicator of Economic Activity (RIEA) revealed that in October 2023, regional economic activity continued to grow compared to the previous month, marking four consecutive months of acceleration. It is noteworthy that the RIEA undergoes data revisions whenever final information from Regional Accounts becomes available. In this regard, the RIEA has been recalculated for this release, resulting in a revision of previously released values and a broader range of changes in the recent past.

As DREM mentioned in the initial release of the RIEA in October 2017, its objective is to "signal the behaviour of economic activity, particularly regarding the direction and magnitude of fluctuations: whether it is in a positive or negative trend, accelerations, decelerations, and the identification of turning points." Its quantitative value, therefore, assumes secondary importance, not presenting itself as a substitute for the actual change of Gross Domestic Product, to be determined with a more varied and comprehensive set of statistical information, although 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 Regional Directorate of Statistics of Madeira (DREM) presents a concise analysis of key short-term indicators divided into themes, emphasizing that many of the mentioned changes are in three-month moving averages, a common technique in economic bulletins to smooth irregularities and show trends.

Economic Activity

As mentioned earlier, regional economic activity in October 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 3.5% this month, up from the 1.8% recorded in the previous September. Note that total revenue in tourist accommodation establisments increased by 18.0% (15.4% in September).

Electricity distribution, typically associated with economic activity evolution, grew by 5.4% in October 2023, surpassing the 3.5% observed in the previous month.

Analysing the ratio between newly formed and dissolved companies, it is observed that in October 2023, 1.8 new companies were created for each dissolved company in the region, a ratio higher than the previous month (1.2).

Private Consumption

Although the current context of growth in Portuguese tourists limits this analysis, one of the indicators revealing the evolution of private consumption pertains 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 7.8% in October 2023, reversing the acceleration observed in the previous September.

Consumer loans granted to households and non-profit institutions serving households decreased by 16.3% in October 2023, the same change observed in the previous month. Meanwhile, acquisitions of new light passenger cars by residents accelerated (a change of +26.9%, compared to +14.9% in the previous month).

Investment

In this domain, the indicators are divided into two groups in terms of evolution: those with positive signs, such as sales of light commercial vehicles (+3.8%; +16.7% in the previous September), median value of housing bank appraisals (+22.6%; +23.0% in the previous month), building permits (+20.6%; +12.1% in the previous month), and cement sales (+10.1%; +4.0% in the last September); and those in decline, such as loans granted to families for housing (-1.1%, -0.9% in the last September) and the balance of loans granted to non-financial corporations (-6.0%, -5.8% in September 2023).

External Demand

Although trade with foreign countries represents only a small portion of the overall trade conducted by the Region (most of which is with the mainland), it is important to note that both exports (-21.4%) and imports of goods (-53.4%) decreased. However, it is noteworthy that this negative change in imports is conditioned by the transaction of high-value goods in 2022, which did not repeat in the same period of 2023. The movement of goods in ports (-1.9%; +3.9% in the previous month), a more comprehensive indicator of foreign trade dynamics, also decreased. In other indicators, in October 2023, it is observed that the acceleration in passenger movement at airports (+8.5%; +8.4% in the last September) is in line with the evolution of total withdrawals at ATMs and purchases through automatic payment terminals with international cards (+20.7%; +18.9% in the previous month).

Labour Market

Data from employment agencies in the Country and the Region show that in October 2023, reductions were observed in job offers (-33.3%), job applications (-18.3%), and also in registered unemployed throughout the month (-18.4%).

Prices

In October 2023, the year-on-year inflation rate, which stood at +3.6%, decelerated compared to the previous month (+3.9%), now being lower in goods (+3.3%) and higher in services (+4.0%). The underlying inflation (excluding unprocessed food and energy products) was +3.8%.

For more information, please visit:

• RIEA - In Focus (Portuguese only)

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