Malta ranks fourth in terms of specialised industrial structures in the EU, according to a European Commission report.

Top place went to Ireland, which has a very strong pharmaceutical base; Sweden, which saw a considerable increase in the refining of petroleum products; and Romania, active in agriculture and fisheries, food products and textiles.

The European Commission report, ‘Competing in global value chains’, looked at the changes in specialisation between 2000 and 2012. Malta saw the most dramatic change in the category for arts, entertainment and recreation, which includes online gaming, which changed from an index of 1.40 to 6.45. Pharmaceuticals also grew from an index of 0.27 to 2.12, while furniture dropped from 2.30 to 1.90.

“In general (although the index is based on relative sector distributions), the larger the economy, the greater the potential for diversification – large countries can harbour more activities than small countries,” the report noted.

A high degree of specialisation in a sector does not necessarily denote that the sector represents a large proportion of the economy; rather, it means that it is relatively more important to the national economy than to the reference economy, here the EU.

In general, the larger the economy, the greater the potential for diversification ­– large countries can harbour more activities than small countries

The report also analysed the performance of EU industrial and service sectors in terms of productivity and its underlying drivers, the resultant changes to industrial and export specialisation, comparative advantages at EU and national level, and the position of the EU in increasingly global value chains.

“It is not yet possible to assess the full impact of the latest crisis on EU industries – they are still recovering and have, with a few exceptions, still not regained their pre-crisis production levels.

“The fragile recovery hinted at by positive growth in 2010-2011 was interrupted by a downturn in the business cycle and EU industries experienced a double dip,” it noted.

EU manufacturing declined further to around 15 per cent of overall gross value added in 2012. The aggregate, however, masks significant differences between member states. Strong recoveries can be seen in the Baltic States, Poland, Romania and Slovakia, for example, which all have regained and exceeded their pre-recession peaks.

There are also significant differences between sectors. Industries producing consumer staples such as food and beverages, and pharmaceuticals, have fared relatively better than others since the outbreak of the crisis.

High-technology manufacturing industries have in general not been impacted to the same extent as other industries.

On average, market services have grown by 1.7 percentage points in the EU overall between 2000 and 2012 and now make up half of EU GDP. The share of manufacturing has fallen by 3.3 percentage points. The proportion of market services has increased in most member states, with the exception of Germany, Estonia, Malta, the Netherlands, Poland and Romania.

The share of non-market services has also increased, reaching 23 per cent in 2012. Pharmaceuticals are the only manufacturing sector which has increased its share of output since 2000.

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