Albania’s economic sentiment index (ESI) increased by 1.1 percentage points (pp) in March, after rising 0.9 pp in February, to around 8.1 percentage points (pp) above the long-term average, the central bank said on Tuesday.

The increase reflected improved confidence in industry, trade, services, and consumers, the Bank of Albania said in its monthly business and consumer confidence survey.

The industry confidence index increased by 1.4 pp in March to 6 pp above the historic average.

The improvement in the industry confidence index in March was determined by optimistic assessments of business orders from exports, as well as a more optimistic assessment of current industrial production. Businesses assess the state of inventories as slightly decreasing. Expectations for future prices have increased slightly compared to the previous month.

The construction confidence indicator rose by 1.6 pp in the month under review to 12 pp above average, whereas the services indicator rose by 1.2 pp.

The increase in the construction confidence indicator this month was driven by businesses' increased assessments of current construction activity. Businesses also expressed optimism about future employment. Price expectations were revised slightly downwards.

Whereas the level of the services indicator stands at around 13 percentage points above the historical average. The improvement in the indicator was driven by businesses' more positive assessments of their current activity performance. Also, expectations for future employment levels have increased.

Meanwhile, the trade confidence indicator fell by 2.1 percentage points in March. However, its level remains around 5 percentage points above the historical average this month. The decline in the indicator was driven by more pessimistic assessments of current business performance, as well as declining expectations for future employment levels. Expectations for future prices have been revised downwards this month.

The consumer confidence indicator also increased, by 2.3 percentage points. The increase for the second consecutive month of this indicator has brought the level of the indicator back above the historical average by 3.5 percentage points. The increase in the consumer confidence indicator this month has reflected both more optimistic expectations for the general situation of the economy and their financial situation in the future, as well as the improved situation of purchases in large amounts.