Albania's economic confidence indicator increased by 1.1 points to some 7 points above the historic average in May, after decreasing by 1.4 points in April, the central bank said on Monday.

The rise reflects upward changes in the construction, services, and consumer trade indicators, the central bank said in a monthly survey.

The construction indicator inched up by 0.7 percentage points, to 13.3 pp above the historic average. The increase in the construction indicator was mainly influenced by the improved assessment of current construction activity, while estimates for ordering contracts made a small downward contribution. Expectations for future prices registered a decline this month.

The consumers’ confidence indicator went up by 2.5 percentage points, to some 2.1 pp below the historic average. The improvement in the consumers’ confidence was influenced by the increase in all four components: expectations for their personal financial situation, for the future economic situation, and assessments for current and expected major purchases.

The industry indicator remained virtually unchanged, at around 8.3 pp above the historic average. From the perspective of industry indicator components, industrial businesses reported an increase in production this month, despite the fact that order contracts are estimated to be decreasing. Business expectations for future prices registered a decrease.

The services confidence indicator rose by 3.4 percentage points, to around 12.6 pp above average. The performance of the services confidence this month was positively influenced by businesses' assessment of the level of demand and the current performance of their business. Businesses' expectations for future prices remained unchanged.

The trade confidence indicator fell by 3.3 pps in May. Its level remains around 9.7 pps above the historical average. The decline in the trade confidence indicator was influenced by both less optimistic assessments of businesses regarding the current sales performance and declining expectations for employment. Expectations for future prices registered a significant decrease after the upward trend of the previous two months.

The confidence index (CI) is constructed for each sector and is calculated as a simple average of the seasonally adjusted balances of the indicators that have the highest correlation with the reference series (the real data series of the economy). The economic sentiment index (ESI) is constructed based on the same balances used to construct CIs for each sector (industry, construction, services, trade, and consumer goods), aiming to capture the activity of the economy in the country. Before aggregating the ESI, these balances are standardized and weighted.