75% of businesses said they were as profitable, or more profitable in 2022 than they were in 2021, according to a survey by The Malta Chamber of SMEs.
The Business Performance Survey 2022 SME Barometer saw a total of 237 respondents. The SME Barometer, launched in collaboration with MISCO, an independent consulting firm, presents quarterly surveys which showcase economic trends based on data accumulated from small and medium-sized enterprises.
While 25% of respondents were less profitable in 2022 than in 2021, 36% said their profitability remained the same while 39% said they were more profitable.
Answering another survey question, Most SMEs (60%) said they saw an increase in total turnover in 2022 when compared to the previous year (2021), while 22% said they remained the same, and 16% registered negative turnover.
In terms of reasons for the increase in sales, the majority of respondents (28%) said that the end of Covid restrictions led to their increase. 18% stated that there was more stability and 16% said that there was an increase in consumer confidence. The rest highlighted a number of other reasons.
By contrast, most respondents (23%) blamed the decrease in sales on spending power decreases, inflation (13%), and an increase in prices (10%). There were many other reasons given as well. For example, 8% of people said that the pandemic repercussions played a part, and another 6% feared that the conflict in Ukraine also caused sales to decrease.When compared to pre-pandemic levels, a sizeable percentage of businesses (39%) said that they're now doing better than in 2019, 15% said that they're equivalent, and 17% are close to 2019 levels.Around a third of respondents stated that their economic levels were below 2019 levels.
In reference to this latter statistic, Misco founding partner Lawrence Zammit said that, in a growing economy, "we need to appreciate that there is constant restructuring," indicating that firms that adapt will thrive, while those that fail to do so will lag behind.
Looking forward to the coming year, the survey also asked participants to voice their expectations for 2023 as a whole. 39% said that the year will be better than before, 43% said that it will be the same as the previous year, and 18% said that it will be worse.
In terms of plans for the future, there were a variety of responses. The most common response (29%) was for the business to remain the same, followed by a desire (21%) to expand business operations in Malta. 11% were still uncertain about what to do, 8% sought to digitalise their business and offer their services online, and a further 8% sought to diversify their line of business.
In terms of what they expect the major challenge for their business to be next year, the top three answers were: (14%) increasing costs, (12%) increasing wage costs, and (9%) labour shortage.
SME Chamber President Paul Abela said the Chamber's main aim was to discuss issues and impact policy decisions. The main issues he brought up included the outsized costs banking was increasingly having on SMEs, the need to upskill the workers that are entering the workforce, and more efficient regulations to ensure a more favourable business environment.