TIRANA, July 10 – Albania’s Economic Sentiment Index suffered a major setback in the second quarter of this year when both business and consumer confidence significantly dropped, according to a quarterly survey by Albania’s central bank.
Measuring confidence in the key services, industry, construction and trade sectors as well as among consumers, the Economic Sentiment Index dropped by about 10 percentage points in the second quarter of this year, but continued remaining above its historical average in a trend it has preserved for the past two and half years after fluctuating below the average rates for about eight years until late 2016.
The key services sector registered the largest confidence decline of about 9 percent in the second quarter of this year on poorer financial situation and expectations about demand and employment for the third quarter of the year despite that period of time corresponding to the peak tourism season in Albania.
Confidence in the construction sector which has reinvigorated thanks to an increase in construction permits and investment in the tourism sector dropped for the second quarter in row to plunge deeper below its historical average on poorer demand for new constructions. The decline came after a short-spell recovery above the historical average that the long-ailing construction sector faced in 2017.
Capacity utilization rates among main industries in the second quarter of the year ranged from 60 percent in the construction sector to 72 to 75 percent in the industry, services and trade sectors, the Bank of Albania survey shows.
Pessimism among consumers also grew for the third quarter in a row to drop slightly below its historical average on poorer financial situation and worse income and spending levels.
The overall confidence drop comes after the Albanian economy grew by a strong 4.45 percent in the first quarter of this year in GDP growth fuelled by hydropower recovery and the oil and mining sector following heavy rainfall and a pickup in commodity prices.
