Central Bank of Malta Trade Dialogue Release – First Edition 2022

News – Press Releases 2022

01/28/2022

Central Bank of Malta Trade Dialogue Release – First Edition 2022

Meetings held between the Central Bank of Malta and non-financial corporations during the fourth quarter of 2021 show that:

• Short-term expectations for business activity have declined slightly.

• Investment plans remained broadly on track.

• The companies are planning additional recruitments.

• Businesses continued to express concerns about labor shortages.

• Cost pressures remained high and were partly reflected in higher selling prices.

In the fourth quarter of 2021, positive business conditions have softened somewhat, with a lower net percentage of companies reporting improved business in the three months prior to the interview. This share fell from 49% in the third quarter to 36% in the last quarter of 2021. During the quarter under review, 57% of the companies contacted reported an increase in activity while 21% reported a decrease. .

Nearly half of businesses surveyed said they expected business activity to expand over the next three months, while 16% expected a decline. A net share of 33% expects business activity to improve in the near term, down slightly from 37% in the third quarter. Meanwhile, the share of contacts indicating that the outlook was uncertain fell slightly.

Cost pressures remained high in the quarter under review, with almost three-quarters of contacts reporting that input prices increased and no companies reporting price cuts. Partly due to high cost pressures, 47% of companies surveyed reported an increase in their selling prices, with an equal percentage reporting prices unchanged. Only 6% of respondents reported sales price declines.

In the fourth quarter, 78% of respondents said they continued with their investment plans as planned, while 14% reported a postponement. The share of respondents who canceled investment plans fell slightly to 2%.

Given the favorable conditions, 38% of companies plan to increase their workforce, slightly above 37% in the previous quarter. However, businesses continued to express concerns about labor shortages.

This publication also includes a box that presents the first information collected during a pilot survey of 17 companies on the impact of Brexit on companies. Just under half of respondents said they had been negatively impacted by Brexit, including higher costs, more regulations, as well as longer delivery times.

The full publication is available here.

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