Industrial confidence in Malta deteriorated further during the last quarter of 2006, a survey carried in the most recent issue of the Central Bank’s Quarterly Review reports. And consumer confidence, although remaining negative, generally improved in the last months of the year.

The Central Bank has drastically changed the way it used to try and assess business confidence through the Business Perceptions Survey, which used to be studied by many people to try and have an idea where the economy was heading.

But, as the bank itself says in this issue published last week, the survey was heavily biased towards manufacturing since the number of respondents in the other sectors was small and the replies of the major operators often swayed results despite capping.

“As a result,” the survey said, “certain survey results were occasionally hard to reconcile with information from other sources.”

The bank has now decided to focus on those sectors outside manufacturing and tourism and primarily in the services sector, including construction and real estate.

But, to track perceptions in the manufacturing sector, the bank will draw on the survey results provided by a local organisation which undertakes the task on behalf of the European Commission, while for consumer sentiment the bank will continue to use the services of a private company which carries out the task on behalf of the European Commission.

According to the measurements made on behalf of the European Commission, the bank reports, industrial confidence in Malta deteriorated further during the last quarter of 2006, although there was a partial recovery in December.

The bank reported that recent data showed improved industrial confidence in the first quarter of this year, moving into positive in March.

As regards the consumer confidence indicator, this remained negative, as negative in December as in September but better than in March and June.

Perceptions improved both as regards general economic conditions and the consumers’ own financial situation although, on the other hand, consumers reported deterioration in their expected ability to save in the coming 12 months. They also reported a worsening of employment prospects.

Later data by the European Commission, the bank reports, indicate that consumer confidence remained negative during the first quarter of this year with an improvement in January followed by deterioration in the subsequent two months.