Many of us have come across media reports about the EY Malta Attractiveness Survey. Most of these reports focused on the fact that many firms stated that they do not think Malta is an attractive destination for FDI. However, only a fewof these reports noted the other side of this survey, that most firms see their future as being in Malta. Many reports stated that the survey was carried out right after the FATF decision and that this was a sign of things to come.
A few days after the EY Survey, another institution issued its own survey of businesses. The Central Bank. But this time, media coverage was completely absent.
The Central Bank of Malta’s Business Dialogue was conducted in the third quarter of the year, that is after the FATF decision. Like the monthly business survey carried out by the European Commission, its results are completely contrary to those of the EY survey. The firms questioned by the Central Bank, like those questioned by the European Commission, are not wary of the future. If anything, their optimism borders on the unrealistic side.
65% of all firms reported higher activity, while 16% said they are doing badly. The net balance of those doing better, at 49%, was nearly twice that observed in the previous survey, conducted just before the FATF decision. Half of the firms with whom the Central Bank spoke reported that they expected business activity to expand, once again much more than what had been observed three months earlier. This occurred despite that a lot of firms said they were experiencing cost pressures arising from foreign markets.
65% of all firms reported higher activity, while 16% said they are doing badly.
Rather than being worried about the FATF decision or rising foreign costs, firms appear to be intent on steaming ahead. A stunning 73% of respondents reported that their investment plans will continue as scheduled, up from 69% in the second quarter.
Firms do not just want to stay in Malta. The overall majority said they want to expand their operations as quickly as is physically possible.
TheJournal.mt undestands that this survey was carried out before the Budget for 2022 which announnced new tax incentives for business investment.
A majority of nearly four out of every ten firms questioned said they plan to hire more staff. More firms expressed concerns about labour shortages. The Central Bank of Malta also reports that “while the Wage Supplement Scheme continues to provide some support for businesses, it is no longer a major factor sustaining employment”.
The most pressing issue for firms is where they can find labour. Given that Malta’s unemployment is now month after month achieving new record lows, one can understand why in the survey most firms plead for more access to third-country nationals.
In this context, the work that has begun to develop a new employment policy is crucial. Government has already announced in the Budget several measures, including an expansion of apprenticeships and the setting up of a training fund to complement the already existing Skills Development Scheme.