Economic sentiment among retailers reached “a new historical low among retailers” in July, the Central Bank (CBM) said on Wednesday. 

In its monthly update, the CBM said that although sentiment had improved in the services sector, industry, construction sector and among consumers, it had reached a historic low among retailers. 

The CBM works out sentiment using the European Commission’s Economic Sentiment Indicator (ESI), a weighted average of the balances of replies to selected questions addressed to firms in five sectors covered by the EU Business and Consumer Surveys and to consumers. 

The sectors covered are industry, services, consumers, retail and construction.

“Confidence within the retail sector fell to a new historical low of -53.6, from -30.1 in the previous month. The recent fall in sentiment was mainly driven by retailers’ expectations of business activity over the next three months and, to a lesser extent, by their assessment of business activity in previous months,” the CBM said. 

Malta's non-essential shops were shuttered for about two months, with some reopening their doors early May. At the time, the government had started easing some measures as the number of COVID-19 cases started to dwindle. 

All restrictions were lifted on July 15, including the lifting of the state of public health emergency, though some had to be reintroduced a few weeks later when the number of new cases again started to spike. 

Additional survey data also indicate that price expectations turned negative in the month under review, it said. 

The ESI rose, CBM said,  but remained “well below the level recorded before the onset of COVID-19”. The increase in sentiment largely reflects improved confidence in the services sector and in industry. 

In June, the volume of retail trade and industrial production contracted again in annual terms, though at a slower pace when compared to May, the CBM said. 

“The number of registered unemployed and the unemployment rate fell when compared with a month earlier, with the latter remaining low from a historical perspective.”