Are the European Commission’s Business and Consumer Survey Results Coincident Indicators for Maltese Economic Activity? (2020)

Aaron G. Grech & Reuben Ellul


The European Commission’s business and consumer surveys are the most extensive regular surveys of Maltese firms and households. The Economic Sentiment Indicator (ESI) for Malta is closely correlated with real GDP growth, particularly when one focuses on the first vintage of national accounts data. This suggests that the opinions expressed by economic agents are partly driven by news prevailing at the time. The sectoral confidence indicators that underpin the ESI are quite highly correlated, with construction sentiment being the most synchronised with sentiment in other sectors. In general, sectoral expectations on future activity appear to be less strongly correlated to changes in national accounts sectoral value added than survey responses to planned employment changes are to observed changes in sectoral employment. Maltese household economic expectations appear to be mostly reflective of current conditions and could be useful to forecast variables that are issued with some time lag, like real GDP.

Journal of Business Cycle Research (2021), 17(1): 91-108 DOI: 10.1007/s41549-020-00044-0