Overall outlook for manufacturing 'still difficult'

Industrial confidence deteriorated last month compared to that registered in October, according to the latest results of the November 2005 Industry Survey.

This was mainly due to a further decline in overall and export order books and a larger number of companies registering "above normal" stocks of finished products.

Looking ahead to the following three months, production expectations last month remained in positive territory but weaker than in October.

A breakdown by industrial groupings shows that, in November, the Consumer Goods Sector and the Intermediate Goods Sector registered an overall worsening position compared to the previous month. On the other hand, the overall position of the Investment Goods Sector improved.

In terms of price expectations, there were more manufacturers last month predicting a fall in selling prices than in October. This development is mainly attributed to negative price expectations in the Intermediate Goods Sector that offset an improvement in selling price expectations for the Consumer Goods Sector. The balance on selling price expectations for the Investment Goods Sector registered no change throughout the period.

With regard to employment expectations, there were less manufacturing firms in November expecting to decrease their total employment over the following quarter when compared to the October survey results.

This reflects an improvement in employment expectations for the Intermediate Goods Sector, which offset deterioration in employment expectations for the Consumer Goods and Investment Goods sectors.

Breakdown by industrial groupings

Consumers Goods Sector: the sector suffered a further fall of confidence over the previous month. Production expectations weakened further, and overall order books declined. Export order books remained "below normal", broadly unchanged from October levels. The sector also registered "above normal" stocks of finished products.

Intermediate Goods Sector: there was a deterioration in industrial confidence, from a positive balance in October to a negative balance in November. Production expectations remained positive but at a lesser extent than those registered in October. In parallel, overall and export order books balances fell further below normal when compared to the balances in the previous month. The sector also registered "above normal" stocks of finished products.

Investment Goods Sector: this was the only sector that registered a stronger industrial confidence last month compared to October. Although export order books suffered a slight decline, overall order books showed modest signs of recovery. In parallel, production expectations for the three months to follow gained further in positive territory. Stocks of finished products in November for the sector were "below normal".

Fieldwork

The November industry survey was carried out between November 10 and 27. Two hundred and two manufacturers, employing around 13,600, replied to the survey.

The monthly industry surveys are intended to monitor the activity, perceptions and outlook of manufacturing industry in Malta, and are being undertaken under the Joint Harmonised EU Programme of Business and Consumer Surveys.

The surveys are carried out using a statistically representative sample of manufacturing firms in Malta. Responses to the surveys are weighted by employment with the results for analysis being given in weighted average form of higher, the same, lower, and always adding up to 100.

The data is interpreted by using the balance of positive over negative responses to 'measure' the trend for the month. NACE headings are also categorised under three broad sectors: Consumer, Investment and Intermediate Goods.

More information on the sector classification (NACE Rev. 1) and the allocation of NACE headings under these sectors (also referred to as the Main Industrial Groupings - MIGs), i.e. the production of consumer goods, intermediate goods, and investment goods, phone the FOI secretariat on 2122-2074 or 2123-4428.