The Central Bank of Malta reports that over the nine months leading up to September 2001, turnover in the construction industry was some 10 per cent higher than in the corresponding period of the previous year.

Work on government projects was mainly responsible for the rise, as the industry’s sales to the private sector remained unchanged. Government outlays continued to expand, rising by over 20 per cent, mostly reflecting work on the new hospital. The latter is expected to accelerate further this year, as the amount allocated to it in the latest Budget has been almost doubled. Expenditure on a number of infrastructural projects by public enterprises, notably the Cirkewwa ferry terminal, also contributed.

The increased construction activity in 2001 had also raised the sector’s value added, and its share in aggregate earnings rose for the first time since 1997.

Both employment income and profits expanded, up by 11.7 per cent and 15.5 per cent respectively. The growth in employment income reflected the recruitment of a considerable number of construction workers over the past two years.

It should be noted, however, that the rate of job creation in construction during the first nine months of 2001 was less than half that recorded in the same period a year earlier, reflecting the relative tightness in this segment of the labour market. Many contractors have, in fact, been reporting a shortage of skilled construction workers, forcing them to offer higher wages. Despite the increase in operating costs, however, profitability in the sector improved for the first time in five years.

Last year construction activity was buoyant, due mainly to public sector projects such as the new hospital, various road works and the construction of the new Cirkewwa ferry terminal, the Bank reports.

On the other hand, the bank reports that private sector construction expenditure had stabilised last year, after having contracted for a number of years.

Meanwhile, employment had risen substantially during 2000, driven mainly by the construction industry, coupled with new job creation in the manufacturing sector.

In contrast, last year, although the construction industry continued to add to its existing complement, employment in manufacturing remained practically unchanged as a sharp rise in the textile industry was offset by small losses across a wide spectrum of other manufacturing sectors, including electronics.

A breakdown of the unemployed by skill category shows that during the twelve months leading up to September 2001 there was a substantial drop in the number of persons seeking manual employment, including skilled employment.

This mainly reflected the increased demand for construction workers, though there was also a sharp drop in the number of persons registering for unskilled manual work. By contrast, the number of persons seeking non-manual jobs rose during the period, probably reflecting the contraction in employment in private services.