Annual growth in business activity close to its long-term average

The bank’s Business Conditions Index indicates that in November, annual growth in business activity was broadly in line with its long-term average.

The European Commission’s economic confidence indicator fell for the second consecutive month in November, and stood below its long-term average. Employment expectations also eased when compared with a month earlier.

Price expectations edged down among firms in industry and in the services sector, but rose in the remaining sectors. They remained above their long-run average in all sectors. Developments in activity indicators were mixed, as industrial production rose at a slower pace on a year earlier, while retail trade contracted at a faster rate. Labour market conditions remained favourable in October.

Residential building permits declined in October compared with their year-ago level. In November, the number of promise-of-sale agreements rose, while the number of final deeds fell on a year-on-year basis. In October, Maltese residents’ deposits, forming part of the broad monetary aggregate M3, decreased from their year ago level. This decline reflects lower balance of financial intermediaries and, to a lesser extent, those belonging to firms. Meanwhile, annual growth in credit to Maltese residents increased compared to a month earlier.

In November, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) and the Retail Price Index (RPI) declined further to stand at 3.9% and 3.6% respectively.

In October, the Consolidated Fund recorded a smaller deficit compared to a year earlier.