In January 2024

Regional economy continued to grow, albeit slowing down

The Regional Indicator of Economic Activity (RIEA) suggests that, in January 2024, the regional economic activity maintained its positive growth trajectory, albeit at a slower pace compared to 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 January 2024 - 6 Key Themes

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

Economic Activity

As mentioned earlier, the regional economic activity in January 2024, although growing, slowed down 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 1.1% this month, down from the 4.4% recorded in the previous December. It is noteworthy that total revenue in the tourist accommodation sector increased by 12.8% (17.7% in December).

The electricity distribution, an indicator typically associated with economic activity, grew by 2.0% in January 2024, down from the 4.2% recorded in the previous month. The diesel released for consumption decreased by 0.8%, below the 1.2% recorded in December.

Analysing the relationship between incorporated and dissolved companies, it is observed that in January 2024, 1.8 new companies were created for each company dissolved in the Region, a lower ratio than the previous month (2.2).

Private Consumption

One of the revealing indicators of the evolution of private consumption refers to the operations of the SIBS network, with cards issued by national banks. Observing the total amounts withdrawn from ATMs and purchases made through automatic payment terminals with national cards, there was a growth of 6.8% in January 2024, confirming the slowdown since the previous November.

The gasoline released for consumption slowed down, with the year-on-year change standing at 7.9% in January 2024, compared to 10.6% in December. Meanwhile, purchases of new light passenger vehicles by residents increased (3.6%; 36.0% the previous month). Consumer loans granted to households and nonprofit institutions serving households decreased by 15.1% in January 2024, compared to a 15.3% drop the previous month.

Investment

Regarding Investment, the indicators are divided into two groups: those showing positive signs, such as sales of light commercial vehicles (94.6%; 50.0% in the previous December), housing bank appraisals (17.2%; 17.4% in the previous month), building permits (9.6%; 7.3% the previous month), and cement sales (6.7%; 19.5% in the last December); and those that are falling, such as loans granted to households for housing (-1.2%; -1.3% in the previous December) and the balance of loans granted to non-financial corporations (-4.4%; -5.1% 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 both exports (-4.2%) and imports of goods (-20.4%) decreased. Cargo movement in ports (9.1%; 11.0% the previous month), which is a more comprehensive indicator of foreign trade dynamics, increased. In other indicators, in January 2024, it is observed that the acceleration in passenger movement at airports (4.8%; 9.5% the previous December) is in line with the evolution of total withdrawals from ATMs and purchases through automatic payment terminals, with international cards (11.6%; 16.7% the previous month).

Labour Market

Data from the entities responsible for the employment area in the Country and the Region show that in January 2024, there were reductions in job offers (-30.6%), job applications (-13.9%), and also in the number of unemployed registered throughout the month (-14.9%).

Prices

In January 2024, the year-on-year inflation rate, which stood at 3.0%, decelerated compared to the previous month (3.3%), being lower in Goods (1.8%) and higher in Services (4.8%). The underlying inflation (which excludes unprocessed food and energy products) was 3.1%.

For further  information, please refer to:

• RIEA - In Focus (Portuguese only)

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