The most used indicator to measure the size and growth of an economy is Gross Domestic Product. It is the sum of the market value of all final goods and services produced, using the only common denominator to all of them, money.
It is good to convert all production to a single unit, be it patacas or any other currency. It makes our accounting life easier, but it does not come free of complications. First, it raises concerns about the accuracy and extent of data collection; second, it complicates comparisons, both over time – prices change over time – and between countries – exchange rates can be volatile.
Further, it raises questions as an indicator of wealth, let alone well-being. In sum, GDP has its virtues and its limitations. That is a long and ongoing debate in economics, and we will not delve further into it here or the possible alternatives, with their merits and demerits.
Other indicators can also be used – all with pros and cons, let us note – more as complementary than full-fledged alternatives. We will then be looking for indicators measuring the economy’s physical, directly measurable features, especially in areas that have a strong correlation with all sectors of the economy. Such as, for example, energy consumption or transportation flows. Their analysis may be further complicated by seasonal or pluriannual cycles, but, leaving that aside, let us here focus on energy indicators. What can they suggest about the economy that complements or refines what we already know from the GDP data in a first approach?
Like all modern-day economies, our economy uses multiple energy sources, and each economic sector uses a different mix of energy sources and follows distinctive patterns of consumption. Commercial activities, including restaurants and hotels, are especially relevant in Macau’s economy, and they have the most complex energy mix.
Their physical fuels consumption in the first quarter all stood noticeably below the comparable period in 2019 (the last ‘normal’ year). Liquid and gaseous fuels are all down by values ranging from 18 percent (for both electricity and natural gas) to 42 percent (diesel). Most of the drop is likely to result from operations that were either suspended or closed permanently. How the income of those keeping their doors open is affected by the current situation is less obvious. It cannot be inferred directly from these figures. For most of them, a significant share of their energy consumption will be fixed costs.