Page 25 - JobsPlus - Occupational Handbook

Job outlook
The Economic Policy Department was tasked with projecting the occupational demand growth rates for Malta for the upcoming five years (2018 to 2022). Projections of occupations were developed in a series of three main interrelated steps, each of which is based on different procedures and assumptions:
• Step 1: Projection of Sectoral Gross Value Added (GVA) up to 2022
• Step 2: Projection of Sectoral Employment Growth up to 2022
• Step 3: Converting Sectoral Employment Demand into Occupational Demand
The results produced in each step were key inputs to the subsequent step and the sequence was repeated multiple times to ensure consistency. A number of robustness checks were conducted to ensure that the methodology was sound.
Step 1: Projection of Sectoral Gross Value Added (GVA)
The methodology adopted for this forecasting exercise was based on the link between the GVA of the Maltese economy and employment. Economic literature shows that economic growth tends to be positively related to employment growth. To establish a more accurate reading of how employment will respond to economic growth, sectoral GVA from National Accounts data was used. The definition of GVA in the National Accounts is the value of the output less the value of intermediate consumption, as it measures the contribution by an individual producer, industry or sector to the Gross Domestic Product (GDP). At factor cost, value added is the gross income from operating activities after adjusting for operating subsidies and indirect taxes.
The first step involved forecasting how GVA by sector is expected to change between 2017 and 2022. The 2017 forecasts were corroborated with actual data for 2017 up to Q3, while figures obtained for the years between 2018 and 2022 were compared to the Ministry of Finance’s latest available macroeconomic forecasts compiled by the Short-term Quarterly Econometric Forecasting Model for Malta (STEMM). Expert judgement was applied in certain cases to reflect the economic intelligence on the ground.
The model specification used for forecasting sectoral GVA was:
Log (Yt) = f (c, AR(1), MA(1), TIME) + μt
Occupational Handbook 2018
25