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

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  • Aaron G. Grech

    (Central Bank of Malta)

  • Reuben Ellul

    (Central Bank of Malta)

Abstract

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.

Suggested Citation

  • Aaron G. Grech & Reuben Ellul, 2021. "Are the European Commission’s Business and Consumer Survey Results Coincident Indicators for Maltese Economic Activity?," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 17(1), pages 91-108, April.
    • Handle: RePEc:spr:jbuscr:v:17:y:2021:i:1:d:10.1007_s41549-020-00044-0
    DOI: 10.1007/s41549-020-00044-0
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    References listed on IDEAS

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    Cited by:

    1. Liudmila Kitrar & Tamara Lipkind, 2021. "Development Of Composite Indicators Of Cyclical Response In Business Surveys Considering The Specifics Of The ‘Covid-19 Economy’," HSE Working papers WP BRP 121/STI/2021, National Research University Higher School of Economics.
    2. Reuben Ellul, "undated". "Timing the Maltese business cycle: A historical perspective," CBM Working Papers WP/01/2021, Central Bank of Malta.

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    More about this item

    Keywords

    Business sentiment; Consumer expectations; Macroeconomic forecasts; Malta;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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