The Malta Federation of Industry president, Martin Galea called for a gradual reduction in public sector employment, and a critical review of the social benefits system to incentivise work.

He was speaking at the presentation of the results of the industry trends survey for the first four months of 2007. The survey, which provides a business perception analysis to the European Commission, is conducted monthly by the FOI and PricewaterhouseCoopers among the manufacturing industry.

Mr Galea took a broad picture of the current state of the Maltese economy in general, and on the manufacturing industry in particular. He said that although short-term indications were signalling a recovery in manufacturing activity during the first four months of 2007, one should take into consideration their implications for the more interesting long-term trends and the important policy challenges that remained ahead, especially on euro adoption, port reform, social security reform, and skills and employment. He also reiterated the need for a smooth transition to the euro and quality-oriented investment in education.

Lino Casapinta and Dr Brian Portelli from Pricewaterhouse-Coopers gave an overview of the results of the FOI Industry Survey. They reported that, in general, the outlook for manufacturing industry in the first four months of 2007 was positive, with key indicators underlining a recovery from the situation prevailing over the second half of 2006.

They also added that the survey revealed a strong business confidence for the manufacturing sector during the respective period, albeit differing trends for the main industrial groupings were evident with the intermediate goods sector registering a level of confidence substantially lower than the consumer goods sector and the investment goods sector.

With reference to the competitive position on local and foreign markets, Dr Portelli underlined that compared to previous months, in April 2007 manufacturing firms perceived a decline in their competitive position both on the domestic market and foreign markets inside the EU. Concurrently, manufacturing firms perceived an improving competitive position outside EU markets.

The report presenting an overview of the results of the Industry Trends Survey is freely available from the Malta Federation of Industry.