In August 2024

Regional economic growth accelerated slightly

The Regional Economic Activity Indicator (RIEA) shows that, in August 2024, the regional economic activity reversed the trend of slowing growth, registering a slight acceleration 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 August 2024 – 7 Topics

The Regional Directorate of Statistics of Madeira presents a concise analysis of the main short-term indicators, divided into themes. It should be noted that many of the changes mentioned are based on three-month moving averages, a common technique in economic bulletins to smooth out irregularities and highlight trends. 

Economic Activity

As previously mentioned, regional economic activity in August 2024 maintained its positive growth trajectory, registering a slight acceleration compared to the previous month. The performance of the tourism sector contributed to economic growth, with overnight stays (excluding local accommodations with fewer than 10 beds) increasing by 1.5% in August 2024 (compared to 3.5% in July). Additionally, total revenues in tourist accommodations observed a 13.6% increase, though this was lower than the 16.5% growth observed in the preceding month.

Electricity distribution, a common indicator of economic activity, grew by 1.1% in August 2024 (down from 1.6% in the previous month). Meanwhile, diesel released for consumption declined by 0.4%, after a 0.2% increase last July.

Analysing the ratio of incorporated and dissolved companies, in August 2024, 2.3 new companies were incorporated for each dissolved company in the Region, a lower ratio than that observed in the previous month (2.7).

Qualitative Indicators

Confidence indicators available for August 2024, compared to the previous month, show increases in the trade and manufacturing sectors, while decreases were recorded in services and construction and public works.

Private Consumption

One indicator reflecting private consumption trends is the amount transacted on the SIBS network with cards issued by national banks. Analysing the total cash withdrawals from ATMs and purchases made with national cards at point-of-sale terminals, a growth of 5.7% was recorded in August 2024, slightly below the 6.4% registered in the previous month.

Gasoline released for consumption slowed slightly, with a 10.5% increase in August 2024 compared to 12.0% in July. Conversely, purchases of passenger cars by residents accelerated by 5.1%, following a 2.0% increase in the previous month.

The balance of consumer loans granted to households and nonprofit institutions serving households decreased by 11.8% in August 2024, following a 12.4% decline in the previous month.

Investment

Regarding investment, the indicators for August 2024 are divided into two groups: those showing a positive trend, such as housing bank appraisals, which grew by 15.9% (compared to 17.1% the previous month), the balance of loans granted to households for housing, which increased by 1.2% (up from 0.7% in July), and cement sales, which registered 9.8% growth after an 11.3% increase in July 2024. On the other hand, some indicators showed declines, such as sales of light commercial vehicles, which fell by 17.6% (-40.2% in the previous month), the balance of loans granted to non-financial corporations, which dropped by 7.7% (-6.9% in July 2024), and building permits, which saw a 35.0% decrease (-13.7% in the previous month). 

External Demand

Although foreign trade represents only a small portion of the Region’s overall trade (most of which is with mainland Portugal), it is noteworthy that both exports (23.7%; 12.8% in July) and imports of goods grew (3.6%; 0.6% in the previous month).

The movement of goods in ports, which offer a broader view of external trade dynamics, increased compared to the previous month (7.1%; -1.8% in the previous month).

Other indicators show that in August 2024, the slight slowdown in the growth in passenger movements at airports (5.1%; 6.5% in July) aligns with the trend in total ATM withdrawals and purchases via point-of-sale terminals with international cards (19.2%; 19.7% in the previous month).

Labour Market

Data from employment authorities at both the national and regional levels show that in August 2024, there was a decrease in job offers (-18.2%) and an increase in both job applications (6.6%) and the number of registered unemployed over the month (6.3%).

Prices

In August 2024, the year-on-year inflation rate, which stood at 3.5%, decelerated compared to the previous month (3.9%), being lower for Goods (1.5%) and higher for Services (5.9%). The underlying inflation rate (which excludes unprocessed food and energy products) was 4.4%, down from 4.2% in July.

For more information, visit:

• RIEA - In Focus (Portuguese only)

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