In June 2024

Regional economy grew at a slower pace

The Regional Economic Activity Indicator (RIEA) reveals that in June 2024, the regional economic activity maintained a positive growth trajectory, although at a slower pace than in 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 June 2024 - 7 Topics

DREM presents a concise analysis of the main short-term indicators, divided into themes, noting that many of the changes mentioned are in three-month moving averages, a common technique in economic bulletins to smooth out irregularities and show trends. 

Economic Activity

As mentioned earlier, in June 2024, the regional economic activity continued its positive growth trajectory, though at a slower pace compared to the previous month.

The performance of the tourism sector contributed to this economic growth, with overnight stays (excluding local accommodation with fewer than 10 beds) increasing by 3.1% in June, slightly below the 3.2% observed in May. Notably, total revenue from tourist accommodation saw a 15.6% increase, higher than the 14.4% growth in the previous month.

Electricity distribution, often associated with economic growth, grew by 1.4% in June 2024, down from 2.9% in the previous month. Diesel consumption rose by 0.7%, after a 0.4% decline in May.

Analysing the ratio between incorporated and dissolved companies, it is observed that in June 2024, 2.4 new companies were incorporated for each company dissolved in the region, a lower ratio than that recorded in the previous month (3.3). 

Qualitative Indicators

The confidence indicators available for June 2024, compared to the previous month, show an increase in the services and trade sectors and a decrease in the manufacturing and construction and public works sectors.

Private Consumption 

One of the indicators reflecting the evolution of private consumption is the SIBS network operations with cards issued by national banks. Observing the total amounts withdrawn from ATMs and the purchases made through automatic payment terminals with national cards, there was a growth of 6.7% in June 2024, higher than the 6.2% recorded in the previous month.

Gasoline released for consumption accelerated, with the year-on-year change increasing by 11.8% in June 2024 (compared to 7.7% in May). On the other hand, purchases of new passenger cars by residents decreased by 2.7% (-16.4% in the previous month). The balance of consumer loans granted to households and non-profit institutions serving households decreased by 13.4% in June, following a 13.2% decline in the previous month.

Investment

Regarding investment, the indicators for June 2024 are divided into two groups: those showing positive signs, such as the bank appraisals on housing (17.2%, compared to 17.0% in the previous month), the balance of loans granted to households for housing (0.1%, following -0.4% in May), and cement sales (16.8%, compared to 6.3% in May); and those in decline, such as light commercial vehicle sales (-36.5%, following a 24.0% increase in May), the balance of loans granted to non-financial companies (-6.7%, after -7.8% in May 2024), and building permits (-5.6%, compared to a 9.1% increase in the previous month). 

External Demand 

Although international trade accounts for only a small share of the total trade conducted by the region (most of which is with the mainland), it is worth noting that exports grew by 10.3% (-3.8% in May), while imports of goods fell by 7.7% (-3.3% in the previous month). The movement of goods through the ports, which is a broader indicator of external trade dynamics, decreased by 6.8% (-2.6% in the previous month). In other indicators, June 2024 saw an acceleration in passenger traffic at airports (6.0%, compared to 4.9% in May), in line with the growth in total withdrawals from ATMs and purchases made through automatic payment terminals with international cards (17.7%, compared to 14.2% in the previous month). 

Labour Market 

Data from employment agencies in the Country and the Region show that, in June 2024, there was a reduction in job offers (-26.4%) and increases in both job applications (13.4%) and the number of registered unemployed (13.0%).

Prices 

In June 2024, the year-on-year inflation rate, which stood at 3.5%, slowed down compared to the previous month (3.9%), with lower inflation for Goods (2.0%) and higher inflation for Services (5.5%). The underlying inflation rate (which excludes unprocessed food and energy products) was 3.9%.

For more information, visit:

• RIEA - In Focus (Portuguese only)

Back

• Prev
• Next