A banner year for the service industry

2023 saw a 6% rise in service sector activity.

In 2023 the activity of firms in the service industry grew by 6%. This was mainly due to the strong rebound in tourism, which was also supported by substantial growth in the information and communication sub sector, as well as in professional services.

In percentage terms, the best quarter of the year was the first, as there was a surge in tourist activity compared to the first quarter of 2022, when there was still a strong effect of the pandemic restrictions on travel. However, even the last quarter of the year was a very positive one. In fact, in the fourth quarter of 2023 firms in the service industry saw sales improve by 5% over a year earlier. In contrast, Eurostat statistics show that, in countries such as Portugal or Spain, sales decreased in the last quarter of the year.

The largest growth observed in Malta’s service industry in the last quarter of the year was in the car sales sub-sector, with an increase of 20%, followed by administrative services, with an increase of 11%, while in the retail of food sub sector there was an increase of 9% over the fourth quarter of 2022. Conversely, real estate turnover fell by around 4% in the final quarter of last year.

The improvement in sales led to an increase in employment income, so much so that the wages paid were 8% higher than in the same quarter of 2023. In several sectors, employment income increased even by more than 10%. This reflected, in addition to an increase in pay, an increase in the number of working hours. For example, in hotels and restaurants there was a 13% increase in working hours demanded by employers.

Meanwhile, employment in the service sector increased by 3% in the last quarter of the year, mainly in professional services and tourism.

Photo: Andrea Piacquadio

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