In July 2024

Regional economy remained on a growth trajectory, albeit at a slower pace

The Regional Economic Activity Indicator (RIEA) reveals that in July 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 July 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, the regional economic activity in July 2024 continued the growth trajectory, though at a slower pace than in the previous month. The tourism sector’s performance contributed to economic growth, with overnight stays (excluding local accommodation with less than 10 beds) increasing by 3.5% in July 2024 (compared to 3.1% in June). Additionally, total revenue from tourist accommodation rose by 16.5%, exceeding the previous month's growth of 15.6%.

Electricity distribution, an indicator typically associated with economic activity trends, grew by 1.6% in July 2024, up from 1.4% in the previous month. Diesel consumption increased by 0.2%, below the 0.7% recorded in June.

In terms of the ratio between companies incorporated and dissolved, in July 2024, 2.7 new companies were incorporated for each dissolved company in the Region, a proportion higher than the 2.4 recorded in the previous month.

Qualitative Indicators

Confidence indicators available for July 2024, show an increase in the construction, public works, services, and trade sectors, with a very slight decline in the manufacturing sector.

Private Consumption

One of the indicators reflecting the evolution of private consumption is the volume of transactions in the SIBS network with cards issued by national banks. Analysing the total withdrawals from ATMs and purchases made with national cards using points-of-sale, there was a 6.4% increase in July 2024, slightly below the 6.7% recorded in the previous month.

Gasoline released for consumption accelerated slightly, rising by 12.0% in July 2024, compared to 11.8% in June. Additionally, purchases of passenger cars by residents increased by 2.0%, following a decline of 2.7% in the previous month.

The balance of consumer loans granted to households and non-profit institutions serving households decreased by 12.9% in July 2024, following a drop of 13.4% in the previous month.

Investment

Regarding investment, the indicators for July 2024 are divided into two groups: those showing a positive trend, such as housing bank appraisals, which grew by 17.1% (compared to 17.2% in the previous month), and the balance of loans granted to households for housing, which increased by 0.6% (compared to 0.1% in June). On the other hand, some indicators show a decline, such as light commercial vehicle sales, which fell by 40.2% (-36.5% in the previous month), the balance of loans granted to non-financial corporations, which dropped by 7.0% (-6.7% in June 2024), building permits, which decreased by 13.7% (-5.6% in the previous month), and cement sales, which contracted by 3.2%, after rising 16.8% in June.

External Demand

Although foreign trade represents only a small portion of the Region's overall trade (most of which is with the mainland), it is worth noting that exports increased by 10.0% (compared to 10.3% in the previous month), while imports of goods decreased by 5.1% (compared to 6.1% in the previous month).

The movement of goods in ports, a broader indicator of external trade dynamics, decreased by 1.8% (-6.8% in the previous month).

In other indicators, July 2024 saw an acceleration in passenger movement at airports (6.5%; 6.0% in June), in line with the increase in ATM withdrawals and points-of-sale purchases using international cards (19.7%; 17.7% in the previous month).

Labour Market  

Data from employment authorities at both the national and regional levels show that in July 2024, there was a reduction in job offers (-24.9%) and increases in both job applications (10.9%) and the number of registered unemployed (10.6%).

Prices

In July 2024, the year-on-year inflation rate rose to 3.9%, accelerating from 3.5% in the previous month, with a lower inflation in Goods (2.4%) and higher inflation in Services (5.8%). The underlying inflation rate (excluding unprocessed food and energy products) was 4.2%, up from 3.9% in June.

For more information, visit:

• RIEA - In Focus (Portuguese only)

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