It is not just productivity that has been decreasing but also the role of manufacturing in the economy. Today, it accounts for some 10-11% of GDP when it used to be some 21% of GDP.

The current EU target is to raise manufacturing to the level of 20% in the national economy by 2020 but it is very difficult for Malta to do so.

This was stated in an interview given to this paper by the Chamber of Commerce president David Curmi (see page 6)

Mr Curmi further outlined the problems facing manufacturing insisting mostly that the price of electricity is prohibitive and assorted port charges further increase the cost of manufacturing in Malta.

Costs to operate in Malta are still very high. Malta has the second highest utility costs in the EU. Unit labour costs are also high, and they have increased at a  higher rate than productivity.

Manufacturing has lost a lot in Malta over the past years but there are huge spin-offs from manufacturing to the rest of the economy. It is estimated that manufacturing can add some 8% to the services industry.