In February 2023

Regional economy continued to accelerate

In February 2023, the Regional Indicator Economic Activity Indicator (RIEA) indicated that regional economic activity strengthened its growth trajectory compared to the previous month.

The RIEA, introduced by DREM in October 2017, serves as a tool to assess the behaviour of economic activity, including fluctuations, accelerations, decelerations, and turning points. It is important to note that the RIEA's value is not a direct substitute for the actual change in Gross Domestic Product (GDP), which is determined using a broader range of statistical data. However, there is a strong correlation between the RIEA and GDP.

Economic Summary – February 2023 - A summary based on the following 6 themes

DREM presents a brief analysis of the main short-term indicators divided by theme, providing insights into various aspects of the economy.

Economic Activity:

As previously mentioned, the regional economic activity in February 2023 exhibited a reinforced positive growth trajectory, showing signs of acceleration compared to the previous month.

The performance of the tourism sector made a significant contribution to the economy's growth, with overnight stays (excluding local accommodation under 10 beds) increasing by 57.9% in that month, surpassing the 43.2% growth recorded in the previous January.

The indicator of electricity distribution, which is associated with the evolution of economic activity, experienced a growth of 1.9% in February 2023, higher than the growth rate of the previous month's (+1.4%). Additionally, the diesel released for consumption continued to grow (+0.1%), albeit at a slower pace compared to the previous month's growth (+2.3%).

Examining the ratio of incorporated and dissolved companies, it was observed that in February 2023, for every dissolved company in the Region, 2.8 new companies were created. This ratio was higher than the previous month value of 1.9.

Private Consumption:

One of the indicators that provides insights into the evolution of private consumption is related to the operations conducted through the SIBS network using cards issued by national banks. Observing the amounts withdrawn and purchases made with national cards at automatic payment terminals, it was observed that there was a growth of 16.4% in February 2023. This growth rate remained unchanged compared to the previous month.

Furthermore, the gasoline released for consumption experienced a modest acceleration, with a year-on-year change of +14.9% in February 2023, slightly higher than the +14.8% growth recorded in January.

The sales of new light passenger cars followed a similar trend in the reference month, showing a year-on-year growth of +53.2%. This growth rate surpassed the +32.6% increase observed in the previous month.

Investment:

In terms of investment, the indicators in February 2023 can be divided into two contrasting trends. On one hand, there is growth in housing bank appraisals (+16.4%; +15.6% in the previous month) and housing loans (+1.4%; +2.0% in January). On the other hand, there are declines in sales of new light commercial vehicles (-41.0%; -66.7% in the previous month), cement sales (-7.0%; -6.3% in January), the balance of loans granted to non-financial corporations (-6.0%; -5.4% in the previous month), and building permits (-4.8%; +2.7% in the previous month).

External Demand:

Although trade with foreign countries represents a relatively small portion of the overall global trade of the RFegion, it is worth noting that both exports (+15.5%) and imports of goods (+38.8%) have shown an increase. Additionally, the movement of goods in ports (+4.8%; +1.3% in the previous month), which serves as a more comprehensive indicator of the dynamics of external trade, has also experienced growth. In terms of other indicators, it is observed that passenger movement at airports has significantly accelerated (+73.9%; +59.2% in the previous month), aligning with the increase in withdrawals and purchases made with international cards through automatic payment terminals (+49.0%; +38.6% in the previous month).

Labour Market:

According to data from the authorities responsible for Employment in the country and the region, there has been a decrease in job offers (-5.0%), job applications (-3.3%), and in the number of registered unemployed persons (-0.8%) in February 2023.

Prices:

In February 2023, the year-on-year inflation rate in the Autonomous Region of Madeira (ARM) accelerated to +8.7%, compared to the previous month, being more pronounced in goods (+10.4%) than in services (+6.1%). The underlying inflation rate, which excludes non-transformed food products and energy, was +8.0%.

For more information, please click on:

• RIEA - In Focus (Portuguese only)

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