The European Commission’s monthly survey of households and businesses showed that in February the economic sentiment index for Malta reached 116.
This was the highest level of economic sentiment among all European Union countries. While across Europe between January and February there was an improvement in sentiment of 1%, in Malta there was an increase of 13%.
Sentiment in Malta is 26% better than in the country with the lowest level of optimism in Europe.
Economic sentiment in Malta in February was 16% better than the historical average and 31% better than the level in February 2021. It was also 5% above the level expressed in January 2019, that is before the pandemic started. In each sector, sentiment is better than the historical average.
Maltese and Gozitan families were more positive than the historical average, and their optimism was much better than a year earlier. A majority of 9% believe that our country’s economy will grow. This is when in the EU a majority of 15% of households expect their economy to continue to deteriorate.
A majority of 9% believe that our country’s economy will grow.
In our country, a majority of 6% of families said they feel they can afford to make above-average purchases. This while a majority of 9% believe that they will manage to save more despite this increased consumption. In Europe, by contrast, a majority of households say they cannot afford to make higher purchases. At the same time they believe that unemployment will rise further, contrary to Maltese and Gozitan families who expect it to fall more.
In manufacturing, economic sentiment is much better than in February 2020. A majority of 55% of factories said that production will increase in the coming months. These companies claimed they had more than three months of guaranteed production in orders they have already received. To keep up with this demand, a majority of 16% of factories are anticipating that they will have to increase employment in the coming months.
In services, sentiment is very positive, and totally contrary to what it was in the same month a year ago. Almost a third of service operators are expecting growth in activity in the coming months.
Even in the retail, sentiment is absolutely the opposite of that of the same month in 2021, when it had been very pessimistic. A majority of 15% reported an improvement in operations in recent months while more than 25% said they expect further growth in the coming months.
In construction, sentiment is very positive, with a majority of 5% of firms saying they need more workers. This is in a context that these operators have on average a backlog of work of more than six months, or twice the historical average.