The most recent edition of the Central Bank of Malta Business Dialogue, held between the bank and non-financial corporations, revealed that during the fourth quarter of 2023, there was a decline in the percentage of firms reporting improved business conditions. When compared to the previous quarter, the numbers dropped from 44 per cent to 35 per cent in the fourth quarter.
Overall, the Central Bank noted that business conditions were less favourable across various economic sectors, except in services where conditions improved.
Looking ahead, a net 42 per cent of firms expected an improvement in short-term business activity, lower than 47 per cent in the preceding quarter, the bank explained.
The net share of companies reporting higher input costs has rebounded to the level reported in the second quarter of 2023. A net 60 per cent of contacts reported that input prices have increased in recent months, up from 46 per cent in the previous period.
On the other hand, the net share of firms reporting higher selling prices stood at 50 per cent in the last quarter of 2023, two percentage points higher than in the previous quarter.
In the quarter under review, the net share of firms planning to invest more this year decreased significantly to 15 per cent, from 50 per cent in the third quarter.
Meanwhile, the Central Bank noted that the net share of firms planning to increase their staff complement decreased by five percentage points, to a net 40 per cent.
“Companies have continued to express concerns about labour and skill shortages and pressures to increase wages. Indeed, two-thirds of contacted firms expect wages in 2024 to rise by more than five per cent,” added the Central Bank.
This publication incorporates a box which compares the predictions of firms reported during the first contact made during 2023 to the outcomes reported during the second interview held in 2023. The bank noted that 55 per cent correctly prediced the direction of change in their firm’s business conditions.
The full publication is available here. The business dialogue survey can also be access through its dedicated dashboard.
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