A study conducted by the Chamber of Small and Medium Sized Enterprises (GRTU) has shown that 84 per cent of businesses questioned have a positive outlook for the current year after registering a successful 2006 for their business.
Commenting on the results, GRTU director-general Vince Farrugia said the GRTU was very happy with the results, which showed that businesses in Malta had had a good year in 2006 and were looking positively at this year, hoping that it would be even better.
“The overall performance is positive and we are very happy about that. 2006 was a good year and the prospects for 2007 are also very good. There has been a marked improvement over the previous year, when several difficulties related to restructuring and European Union membership had to be overcome. Now we have reached a point where businesses have begun to register growth again,” he said.
But while various enterprises in several sectors of the economy said 2006 had been a good year, and they were looking forward to another equally good year, restaurants, hotels and bars, especially those in tourist areas, did not have such positive replies. The number of tourists declined last year, so business in tourist areas was also down.
The study was carried out among a sample of 350 businesses chosen randomly from Malta and Gozo.
While 38.7 per cent said that they had made between 10 and 30 per cent more than they had made in 2005, 29.8 per cent said they had made a loss of between 10 and 30 per cent more than in 2005 and 31.4 per cent said their business was stable – neither more profit nor more loss.
When asked why they had made more money in 2006, the respondents gave various replies but the majority said it was due to schemes and measures they had introduced within their business.
Other reasons included more importance being given to the quality of the service provided, the effect of EU membership, consumers having more money to spend, an increase in advertising campaigns and an increase in the number of products and services offered.
Respondents who fared worse than they did in 2005, blamed pessimism on the part of customers, the illegal importation of products and an increase in expenses, taxes and regulations, as well as greater competition.
Asked about sales, 43 per cent of respondents said their sales had grown by between 10 and 30 per cent, 29.5 per cent said their sales had fallen by the same amount and 27.4 per cent said their sales had remained constant.
Asked what they believed could help their businesses grow, respondents gave several replies, among which were fewer taxes and regulations, a more positive environment, an improved economy, more support from banks and financial institutions and an increase in the number of tourists visiting Malta.
Only five per cent of respondents said their business would do better with the introduction of the euro.
Asked about their outlook for 2007, 84 per cent said they were looking at a positive year, while the balance said they expected to be worse off this year. Giving their reasons for why they will do better this year, many respondents said that the country’s economy was improving. Others gave different reasons, including a reduction in taxes, more spending money, more tourists and more EU-funded projects. Four per cent said they will do better because it is the year before a general election.
Mr Farrugia said the result reflected the country’s economic performance, with businesses finally picking up from the no growth registered in 2005. He said the GRTU expected the government to reduce bureaucracy because this was hampering businesses in Malta. Bureaucracy, he said, was costing local businesses between Lm20 million and Lm30 million.