Forty-four per cent of small and medium enterprises registered a decrease of 30 per cent or more in profit between January and June this year when compared to last year, according to a study carried out by the Chamber for Small and Medium Enterprises.
The study found that 24 per cent of SMEs are concerned about the price of fuel while 21.8 per cent are also concerned about the economy’s growth.
The results were presented by GRTU vice-president Marcel Mizzi during a seminar – a joint collaboration between the GRTU and Forum Malta Fl-Ewropa to celebrate SME Day in Malta.
Another 30 per cent said that their profits remained the same while only 26 per cent said profits increased by 30 per cent or more.
Those who saw their profits increase attributed their success to increasing the range of services and products on offer.
However, higher running and fuel costs, the electricity surcharge and a slow economy were among the main reasons blamed for the decrease in profit.
Mr Mizzi said the survey was carried out over the phone, in an online survey, and by email.
Of the 290 respondents, the majority (58 per cent) were importers and retailers, followed by 27 per cent of SMEs in the services industry while the remaining 15 per cent did not specify.
Only 26 per cent of SMEs said that their turnover between January and June 2008 remained the same when compared to the same period last year. However, while 24 per cent said that in 2008 they had an increase of 10 per cent over last year, 17 per cent said that they registered a decrease of more than 10 per cent. Only three per cent said that their turnover increased by 30 per cent when compared to the first six months of 2007 and 11 per cent said turnover increased by more than 20 per cent.
However, 10 per cent said their turnover decreased by more than 30 per cent while another nine per cent said turnover decreased by more than 20 per cent.
Most SMEs (33 per cent) said they employ between three to 10 employees. However, a sizable percentage – 17 per cent – said they employ over 30 employees. 15 per cent of respondents said that they were running a one-man business while another 13 per cent said that they employed between 11 to 15 people.
The majority, 65 per cent, said that they will not make any changes and invest further. Another 10 per cent said they will invest less in their business while 23 per cent said they will invest more. Only two per cent said they will close down the business.
Most of the respondents said they wanted the government to introduce new measures to stimulate business, reduce red tape and income tax, the electricity surcharge and the price of fuel.
In his address, Finance, Economy and Investment Minister Tonio Fenech called for the setting up of one central unit bringing together all the services used by SMEs. This move would form part of the implementation process of the EU Services Directive which would come into effect in December 2009.
The minister explained that the directive covers all service activities, except for those covered by specific EU directives which are financial, electronic communications and transport services.
Furthermore, in the near future the government will soon launch the General Accounting Principles for Smaller Entities (GAPSE) – an initiative that aims to reduce the audit and financial statement reporting requirements of SMEs to a more realistic level, while making compliance more affordable.
The operations of Malta Enterprise and Malta Industrial Parks are being reviewed to place more focus on SMEs specific needs, said Mr Fenech.