In December 2023,
Regional economy grew at a slower pace than in the prior month
The Regional Economic Activity Indicator (IRAE) suggests that in December 2023, regional economic activity maintained its positive growth trajectory, albeit at a slower pace than the previous month.
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.
Economic Overview for December 2023 - 6 Key Themes
DREM (Regional Directorate of Statistics of Madeira) provides a brief analysis of the main short-term indicators divided by theme.
Economic Activity
As previously mentioned, the regional economic activity in December 2023 continued its positive growth trajectory, albeit showing signs of deceleration 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 4.4% this month, below the 5.7% recorded in the previous November. It is noteworthy that total revenue in tourist accommodation increased by 17.7% (19.4% in November).
The electricity distribution, an indicator typically associated with the evolution of economic activity, grew by 4.2% in December 2023, slightly below the 4.3% observed in the previous month. Diesel consumption also increased by 1.2%, also below the 2.8% recorded in November.
Analysing the relationship between newly constituted and dissolved companies, it is observed that in December 2023, 2.2 new companies were created for each dissolved company in the Region, a proportion higher than that of the previous month (2.0).
Private Consumption
One of the revealing indicators of the evolution of private consumption refers to operations within the SIBS network, with cards issued by national banks. By observing the total amounts withdrawn from ATMs and purchases made through automatic payment terminals with national cards, a growth of 6.9% was recorded in December 2023, confirming the deceleration that occurred in previous November.
The gasoline released into consumption slowed down, with the year-on-year change settling at +10.6%, in December 2023, when it had been +13.5% in November. On the other hand, acquisitions of new light passenger vehicles by residents increased (+36.0% and +65.3% in the previous month). Consumer loans granted to households and nonprofit institutions serving households decreased by 15.3% in December 2023, after having fallen 15.9% in the previous month.
Investment
Regarding investment, the indicators are divided into two groups: those showing a growth, such as sales of light commercial vehicles (+50.0%; +29.1% in the previous November), housing bank appraisals (+17.4%; +20.6% in the preceding month), building permits (+6.4%; +7.7% in the previous month), and cement sales (+19.5%; +15.2% in the last November); and those in decline, such as loans granted to households for housing (-1.3%, -1.0% in the last November) and the balance of loans granted to non-financial corporations (-5.1%; -6.4% in December 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 exports (+2.7%) increased and imports of goods (-25.3%) decreased. However, it should be taken into account that this negative change in imports is conditioned by the transaction of high-value goods in 2022, which did not occur in the same period of 2023. The movement of goods in ports (+11.0%; +5.1% in the previous month), which is a broader indicator of external trade dynamics, increased. In other indicators, and in December 2023, it is observed that the growth in passenger movement at airports (+9.5%; +10.1% in the last November) is in line with the evolution of total withdrawals from ATMs and purchases through automatic payment terminals with international cards (+16.7%; +21.3% in the preceding month).
Labor Market
Data from the entities responsible for Employment in the Country and the Region show that in December 2023, there were reductions in job offers (-35.5%), job applications (-18.0%), and also in the unemployed registered throughout the month (-18.4%). The total average gross monthly remuneration per worker (per job position) increased by 5.6% (+6.4% in the previous November).
Prices
In December 2023, the year-on-year inflation rate, which stood at +3.3%, accelerated compared to the previous month (+2.9%), being lower in Goods (+2.1%) and higher in Services (+5.1%). The underlying inflation (which excludes unprocessed food and energy products) was +3.5%.
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