In January 2023

Region reversed the trend of economic activity and accelerated

The Regional Indicator of Economic Activity (RIEA) shows that, in January 2023, the economic activity accelerated, thus reversing the previous trend.

As mentioned by DREM 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 January 2023 from 6 topics

DREM presents a brief analysis of the main short-term indicators, broken down by themes.

Economic activity

As mentioned above, the RIEA in January 2023 reversed the slowdown in growth, which began in May 2022, surpassing the value of the previous four months.

The performance of the tourism sector made an important contribution to economic growth, as overnight stays (excluding local accommodation under 10 beds) rose by 43.2% in that month, above the 26.1% recorded in December.

Electricity distribution – an indicator associated with the evolution of economic activity - registered a growth of 1.4% in January 2023, above the value registered in the previous month (+0.3%). The same trend took place in the diesel released for consumption, which, in January, grew by 2.3%, when it had fallen by 3.4% in the previous month.

Analysing the ratio of incorporated and dissolved companies, in January 2023, for each company dissolved in the Region, 1.9 new companies were created, a ratio higher than that of the previous month (1.3).

Private consumption

One of the proxies for the evolution of private consumption are the operations of the SIBS network with cards issued by national banks. The amount of withdrawals and purchases with national cards, through automatic payment terminals showed a 15.5% growth in January 2023, maintaining the acceleration seen since last October.

The gasoline released for consumption also accelerated, with the year-on-year change standing at +14.8% in January 2023, when it had been +7.0% last December.

Sales of new light passenger cars showed a similar trend in the month in question, growing by 32.6% in year-on-year terms, above the +23.0% of the previous month.

Investment

As for investment, in January 2023, the indicators can be divided into two blocks, with an opposite trend: while the bank appraisals on housing (+15.6%; +14.0% in the previous month), balance of loans for housing ( +2.0%; +2.5% in December) and building licensing (+1.8%; -9.9% in the previous month) are on the rise, sales of new light goods vehicles (-66.7 %; -65.6% in the previous month), cement (-6.3%; -15.4% in December) and the balance of loans granted to non-financial corporations (-5.4%; -2. 6% in the previous month) are falling.

External demand

Although trade with foreign countries is only a small share of the overall trade carried out by the Region (most of which with the mainland), it should be noted that both exports (+15.4%) and imports of goods (+22.1%) grew. The movement of goods in ports (+1.3%; -0.9% in the previous month), the most comprehensive indicator with regard to the dynamics of trade with foreign countries, also grew. In the remaining indicators, and in January 2023, there was an acceleration in the movement of passengers at airports (+59.2%, +43.9% in the previous month) in line with withdrawals and purchases with international cards, through automatic payment terminals (+41.9%; +31.1% in the previous month).

Labour Market

Data from the organisations in charge of monitoring the labour market in the country and the Region show, in January 2023, an increase in job offers (+13.1%), job applications (+8.7%) as well as in the registered unemployed during the month (+11.7%).

Prices

In January 2023, the year-on-year inflation rate stood at +8.3%, being sharper for goods (+10.3%) than for services (+5.4%). The underlying inflation rate (which excludes unprocessed food and energy) was +7.8%.

For more information, please click on:

• RIEA - In Focus (Portuguese only)
• RIEA - Time series
• Monthly Economic Indicators

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