An SME Barometer, commissioned by the Malta Chamber of SMEs, found a prevailing sense of uncertainty with regards to local business’ investment plans for the upcoming year, reflecting cautious optimism amidst economic fluctuations.

Respondents were asked whether, over the next 12 months, they believe it will be a good time to invest.

With possible answers of ‘yes’, ‘no’ and ‘not sure’, the proportion of respondents who are not sure about their investment sentiment remained relatively unchanged, coming at 57 per cent in the fourth quarter of 2023, and 56 per cent in the first quarter of 2024.

The proportion of businesses that responded ‘no’, that is, they do not feel it will be a good time to invest over the next 12 months increased by five per cent, coming it at 27 per cent in the fourth quarter of 2023 and rising to 32 per cent in the first quarter of this year.

Additionally, the proportion of respondents that replied ‘yes’ to the question dropped by four percentage points, from 16 per cent in Q4 2023 to 12 per cent in Q1 2024. It is also noteworthy that over the past four quarters, Q1 2024 registered the lowest percentage of those declaring they are willing to invest.

The barometer, carried out by MISCO, surveyed 414 businesses operating in Malta, with a margin of error at 4.9 per cent. The survey was carried out online between 19th and 30th April, before the Vitals inquiry findings which sees several high-profile local politicians facing criminal charges.

Other key findings from the report include top concerns, where employee shortages and inflation persist as the primary challenges being faced by local businesses, underscoring the difficulties in staffing and managing operational costs.

Regardless of size, businesses echo concerns over employee shortage (43%, Q1 2024), inflation (28%, Q1 2023), and unfair competition (22%, Q1 2024), indicating widespread challenges cutting across different sectors.

When compared to the previous quarter, that is the last months of 2023, the proportion of businesses that expressed concerns increased by around four percentage points.

As for local businesses’ views on Government, a lack of good governance came out as a top concern, just above overpopulation – surpassing major issues like inflation. This signals the business community’s urgent call for Government intervention in addressing systemic challenges.