The second quarter of 2021 saw manufacturing register one of the best quarterly performances in its history, TheJournal.mt can confirm.
In April there was a record increase of 16% in industrial production, followed by a 7.2% increase in May and another double-digit increase, 13.6%, in June. This means that, on average, compared to the second quarter of 2020, there was a rise of 13% in industrial production. This was the best expansion in output in the second quarter of the year in more than a decade.
Moreover, Eurostat data indicate that the output of the manufacturing industry has now risen above its pre-pandemic level, by some 7%. To give some background, in the less dramatic 2008 economic crisis, it took manufacturing three to four times longer a time period to recover its lost output.
The rise in output was mostly for export purposes. In the first half of 2021, industrial exports reached €1.2 billion, an increase of 11% over 2020. Exports of pharmaceutical products rose by nearly half, those of rubber products and fabrics rose by a fifth, while those of optical instruments and printed materials rose by nearly a tenth.
This was the best expansion in output in the second quarter of the year in more than a decade.
The European Commission’s monthly survey on business sentiment indicates that the manufacturing industry was the second-most optimistic sector in Malta, after services. Most of the factories interviewed told the Commission that they had increased production in recent months. Moreover, a majority of a fifth of respondents said that they expect further growth in the coming months. In fact, the manufacturing companies interviewed on average claimed that they have already received orders that guarantee around six months of production. More than two fifths of the factories interviewed therefore claimed that they would have to increase the workforce to be able to fulfil this very strong demand.
These excellent results contrast sharply with the assessments made by the Opposition and its spokespersons on the industry. Just a few months ago, Jason Azzopardi was scripting a narrative that Malta’s industry was hobbled by high utility bills, and this was destroying their competitiveness, leading to the worst results in Europe. Azzopardi had claimed that this was clear evidence that the Electrogas deal was having serious economic repercussions.
A majority of a fifth of respondents said that they expect further growth in the coming months.
Now that Malta’s industrial sector is performing amongst the best in Europe, one understands how misguided Azzopardi’s analysis was. This is yet another episode which confirms the paucity of expertise on Opposition benches when it comes to economic and financial analysis. At a time when Malta needs legislators who understand very well the economy, so as to push for a sustainable recovery, the Opposition party offers very little.
By contrast, the innovative economic policies introduced during the pandemic have surprised many experts. Instead of facing an Armageddon of job losses and bankruptcies as seen in other European countries, our economy is straining against labour shortages. To address these new issues, one cannot rely on politicians who are so adrift that they do not even realise that this sector is steaming ahead, and not collapsing as they say.
Bernard Grech’s reshuffle of portfolios ended up weakening the PN’s shadow cabinet’s economic competency and with it, the party’s electoral prospects.