Business outlook is more positives than that of consumers. Companies think sales will begin to grow, but a majority anticipates no new investments because of high economic uncertainty.
TIRANA TIMES
TIRANA, May 17 – Albania’s consumer confidence index dropped in the first quarter of 2010 as people were more pessimistic about their economic futures, according to the latest report by the Bank of Albania. However, business owners and executives had a more optimistic outlook than the general public.
The consumer confidence index fell by 2.4 percentage points during the first three months of 2010. This is part of a continued decline of this indicator trend since the third quarter of 2009. And now it has dropped below its long-term average, according to the central bank’s study.
About 46 percent of the respondents expect the unemployment rate to rise in coming months and only 16.6 percent of those surveyed think there will be less unemployment than now in the near future. These perceptions are also more negative than the last time the survey was held.
Another worrying sign is that about half of the people living in Albania have delayed major purchases, according the survey. They also want to save more this year, expecting tougher times ahead.
However, the good news is that businesses felt completely different for the same period of the study, the first three months of 2010. Companies were optimistic that sales will begin to grow, but the majority of respondents anticipate no new investments because of high economic uncertainty.
About 64.8 percent of businesses say that they have committed no new investments in the past six months. While 35.2 percent of businesses that have made new investments in the last half say they have focused mainly on equipment.
Although service businesses were the most pessimistic, demand for their services has been positive in the first quarter of 2010 when compared with the previous quarter.
Businesses also said they felt better about the level of order, security and political stability in Albania, elements which can aid or hinder business activities.
The situation of the informal economy and infrastructure problems continue to qualify as obstructive factors of business activity in the services sector, however, the report says.
Capacity utilization of the services sector during the first quarter of 2010 resulted was 66 percent, about 4.7 percentage points lower compared to the previous quarter.
Businesses expect a revival in the service sector activity in the future quarter. They also think employment will grow, according to the survey.
The consumer confidence began to decline in the last quarter of 2008 and marked the lowest level in January to March 2009. Since then, expectations of Albanians have improved, but the outlook index still below its historical average, Bank of Albania says.
Monitoring consumer confidence is a normal international practice which is done through interviews with consumers and business executives.
