In December 2021

Regional economy grew at a slower pace

The Regional Indicator of Economic Activity (IRAE) indicates that in the month of December 2021, the regional economic activity recorded a strong growth, although at a slower pace than in the previous month.

As mentioned in the first release of RIEA, in October 2017, its purpose is “to signal the behaviour of economic activity, namely concerning its direction and magnitude of fluctuations: whether it is in the positive or negative ground, accelerations, decelerations and the identification of turning points”. Therefore, its quantitative value assumes secondary importance, not being a substitute for the volume change of the Gross Domestic Product - determined with a more varied and complete set of statistical information - although there is a strong correlation between the two variables.

Monthly Economic Survey - The economic situation of the Autonomous Region of Madeira in December 2021 from 6 topics

In this release, the Regional Directorate of Statistics of Madeira (DREM) presents a brief analysis of the main short-term statistical indicators which are part of the Monthly Economic Survey, available every month on DREM’s website since October 2017. Note that in addition to the RIEA, this survey also includes other indicators, 37 in total, divided into 6 topics: Economic Activity, Private Consumption, Investment, External Demand, Labour Market and Prices. It should also be noted that the unit of measurement of the indicators corresponds to year-on-year changes, most of them based on three-month moving averages, which are used to smooth the data. Using this method, as an example, the annual change for December corresponds to the ratio between the average of the values from October to December 2021 and the average of the values for the months of 2020.

Economic activity

As mentioned earlier, the RIEA maintained steady growth in December 2021, although decelerating.
The recovery of the tourism sector was an important contributor to this performance, with overnight stays (excluding local accommodation under 10 beds) increasing by 208.7% in the month.

Electricity consumption - an indicator closely linked to the growth of economic activity - recorded a year-on-year change of 8.5% in December 2021, higher than the value recorded for the 3 previous months (8.0% in November and October; 8.2% in September). Also with an upward trend is the diesel released for consumption, which increased by 11.7% this month.
When analysing the ratio of formed and dissolved companies, it is noted that in December 2021, for each dissolved company in the Region, 2.2 new companies were created, slowing down compared to the previous two months (3.0 in October and 3.5 in December).

Private consumption

One of the indicators that can be related to private consumption is the operations on the SIBS network with the cards issued by the national banks. Analysing the amounts of withdrawals and purchases through automatic payment terminals (APT) using this type of card, there is a robust growth of 9.0% in December 2021, despite decelerating since June.

The gasoline released for consumption also shows an upward trend, rising by 16.3% year-on-year.

On the other hand, consumer credit and other loans to households and non-profit institutions serving households increased by 0.7% in December 2021.

Investment

The available indicators for investment are all on the rise in December 2021, with cement sales (+30.9%) standing out. The construction and housing sectors also show dynamism in terms of the number of buildings completed (+6.2%) and the balance of housing loans (+5.3%). The dynamism of the housing market continues to be reflected in prices, which rose by 8.9% in December.

External demand

Although trade with foreign countries represents only a small part of the Region's total trade (the majority of it is with the mainland), it should be noted that both exports (+15.7%) and imports of goods (+2.7%) show the same trend as the movement of goods in ports (+12.7%), the most comprehensive indicator of the dynamism of trade with foreign countries. Among the indicators more related to the export of services, the growth of passengers in airports (+193.1%) and transit passengers on cruise ships (+421 151.9%) were very pronounced, mainly reflecting the stronger conditioning of economic activity in the same period of the prior year.

Labour Market

The unemployment rate fell to 6.6% in the 4^th quarter of 2021, the second lowest in the time series that began in the 1^st quarter of 2011. This development is in line with the increase in the employed population (+3.2%) and the decrease in the unemployed population (-42.6%) recorded in this quarter. Data from the organisations responsible for employment in the country and the Region show an increase in job offers (+58.1%) and a 30% decrease in both job applications and registered unemployed in December 2021.

Prices

Year-on-year inflation accelerated in the last quarter of 2021, reaching an annual high in December (+2.9%), more pronounced for goods (+3.4%) than for services (+2.1%). The underlying inflation rate (excluding unprocessed food products and energy, the latter with a price increase of about 16.5%) was only 1.8%.

For more information, please click on:

• RIEA - In Focus (Portuguese only)

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