The Institute of Economic Analysis and Development (IMAD) says in the new Economic Mirror that the growth of activity in the construction sector and manufacturing, which was modest in the second half of 2018, picked up at the beginning of 2019.

The growth of revenue from commercial services and trade has also continued. In the first month of the year, the growth of exports of goods increased, while the growth of exports of services slowed down, while remaining at a high level.

The business sentiment has remained almost unchanged since the mid-2018, with the exception of manufacturing. "The sentiment has again deteriorated in this segment due to lower export orders, while the slowing down of growth in the main trade partners in the eurozone resulted in lower expectations by companies regarding exports."

Considering the expected trends in the main trade partners in the eurozone, IMAD expects the growth of exports to slow down in the remainder of the year. The main factors for the lower expectations are uncertainty related to trade disputes and Brexit, and the increasingly noticeable slow-down of China's growth.

The growth of the economic activity has reflected on the labour market, where the increasing demand for labour force has contributed to a high employment rate and a further decrease in the number of registered unemployed persons.

The survey unemployment rate approached the pre-crisis level in the last quarter of 2018, the think tank says, adding that the increasing shortage of workforce, reported by companies, has resulted in facilitated employment of foreigners and a faster growth of wages.

The increased growth of wages, together with the growth of social transfers, increases the disposable income and positively affects spending by households, which are spending more on durable goods and tourist services at home and abroad.

The growth of household spending has also resulted in a growth of prices of goods and services, with the annual inflation in March somewhat increasing, but remaining at a relatively low level, IMAD adds.