Labour shortages are no longer a cyclical concern but have evolved into a “structural constraint on growth” locally and globally, economist JP Fabri warned.

Mr Fabri spoke to WhosWho.mt after a World Economic Forum (WEF) report found that talent and/or labour shortages top the list of Malta’s most serious near-term economic risks.

“Labour shortages have shifted from a cyclical concern to a structural constraint on growth; both globally and here in Malta,” he said.

He pointed out that another recent WEF report, on the future of jobs, found that evolving technology, demographic change and rising skill gaps are reshaping labour markets worldwide.

Many employers are already reporting talent shortages as a major barrier to organisational transformation and a rapid pace of change in required skills that outstrips current workforce capabilities. 

“In Malta, this global backdrop overlays a domestic tight labour market,” he added.

He noted that the IMF’s 2025 Article IV staff concluding statement for Malta explicitly flags labour shortages and skills mismatches as emerging constraints on growth, especially as the economy transitions from labour-intensive services to a productivity-driven economy.

Shortages were also flagged as a concern by international investors in the EY Investment Attractiveness Survey 2025.

“Persistently low unemployment alongside rising job vacancy rates underscores the depth of the challenge: growth depends more on the ability to fill and upgrade jobs than on adding more hours at the margin,” he said.

Mr Fabri called for a multi-pronged strategy – involving training, education and labour and immigration policies - to address these shortages.

“First, aggressively scale up-skilling and re-skilling programmes to close the gap between employer needs and worker capabilities,” he said.

“Second, align education and training with future job trajectories in tech, care and green sectors flagged by the WEF. Finally, evolve immigration and labour policies to attract and retain high-value talent while deepening participation among under-represented groups.”

“Without coordinated action across business, government and education, worker shortages will constrain productivity, investment and Malta’s long-term competitiveness.”