Business and consumer sentiment remained higher than average in March despite a slight dip from February levels, with Malta’s industrial sector feeling especially glum about its near-future.

Figures derived as part of an assessment by the Central Bank showed that Malta’s industry, retail and construction sectors all registered declines in business sentiment last month when compared to February.

But while there is widespread expectation that prices will rise in the coming months – with price expectations hitting a high in the services sector – consumer confidence turned positive in March, with expectations of major purchases over the next 12 months increasing. 

Malta’s Economic Sentiment Indicator score last month hit 108.6, down from February’s 115.7 but still higher than the 105.2 averaged last year. 

The ESI is an EU-created composite metric that seeks to get a snapshot of how industry, the service sector, consumers, retail and construction sectors feel about their economic prospects. 

Malta’s ESI score hit historic lows in 2020 as the COVID-19 pandemic hit but has gradually recovered and is now above the long-term average of 100. 

The March score was especially impacted by a sharp drop in sentiment within the industrial sector, though it remains above its long-term average. 

Local industry is going through a trying period, with annual growth in the industrial production index down for a seventh consecutive year-on-year period. 

The Central Bank report attributed the recent decline to a “significant” decrease in output of companies involved in manufacturing goods such as medical instruments, toys and related products, as well as clothing manufacturers. 

Production in the energy sector increased for the fifth consecutive month in February, with outputrising by 5.9% in annual terms.

The retail sector also grew a bit gloomier in its outlook, though expectations of sales in the next months have improved.  

In the construction sector, sentiment remains above its long-term average but stakeholders were especially concerned about employment expectations, which turned negative in March. 

While the industrial, retail and construction sectors had relatively bad months, confidence within the service sector improved, with stakeholders saying demand increased over the previous three months. However, sentiment about the next three months has weakened from February. 

Price expectations have increased across the board when compared to a year earlier, the report found.