Economic sentiment rises in Albania as key sectors show positive growth
Albania’s Economic Sentiment Indicator (ESI) saw a modest rise of 0.6 percentage points in September, continuing the upward momentum from the previous two months. The current ESI is now 12 percentage points higher than its long-term average, reflecting positive sentiment across several major industries.
Why is this important: The steady increase, primarily driven by rising confidence in the industrial, construction, and services sectors, suggests Albania’s economy is on stable ground. However, concerns remain in the trade sector, where sentiment has dipped, and consumer confidence, which remains unchanged.
Sector Breakdown:
- Industry: The Industrial Confidence Indicator (ICI) rose by 2.5 percentage points, making it the fourth consecutive month of growth. This confidence surge is underpinned by positive assessments of current industrial output and strong export expectations, with the ICI now 14 percentage points above the historical average.
- Construction: The Construction Confidence Indicator (CCI) climbed by 1.2 percentage points in September, driven by better evaluations of current construction activity. However, while employment expectations in the sector improved slightly, price expectations fell.
- Services: The Services Confidence Indicator (SCI) saw a strong rise of 3.1 percentage points. This was largely due to more optimistic views on business activity and demand, along with a rise in employment expectations. Despite monthly fluctuations, the SCI remains 18 percentage points above its long-term average.
- Trade: The Trade Confidence Indicator (TCI) fell by 2.3 percentage points in September, after a significant increase in the previous month. The drop was mainly due to declining employment expectations, along with slightly lower assessments of current business performance.
- Consumer Confidence: The Consumer Confidence Indicator (CCI) remained flat compared to the previous month, with no significant changes in overall sentiment. However, expectations for future unemployment did rise slightly, indicating potential concerns among consumers about the job market.
What’s Next: As Albania’s economy experiences these mixed signals across various sectors, it will be critical to focus on maintaining confidence in key areas like industry and services while addressing the challenges seen in trade and consumer sentiment.
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