Close to two-thirds (64%) of businesses feel that Malta is moving in the wrong direction, according to a new barometer published by the Chamber of SMEs on Thursday.

The SME Barometer for Q2 of 2026 was published by the Malta Chamber of SMEs in collaboration with MISCO Malta on Thursday.

Although 36% of respondents believe Malta is moving in the right direction, 64% believe Malta is moving in the wrong direction, the Chamber of SMEs said in a statement which heralded the publication of the barometer.

A majority of businesses (56%) remain uncertain whether the next twelve months represent a good time to invest, while only around one in five businesses believe it is the right time to make new investments.

Among those who believe Malta is moving in the wrong direction, the principal reasons relate to concerns over quality of life, economic pressures, infrastructure and national planning, and cost of living, reinforcing the importance of sustainable long-term planning alongside continued economic growth.

The survey found that employee shortages remain the single biggest challenge facing SMEs, cited by almost four in every ten businesses (38.8%), slightly down from the previous survey.

"Despite ongoing efforts to increase employee supply, recruitment continues to constrain business growth across multiple sectors," the Chamber of SMEs said.

Unfair competition remains the second most pressing concern (19.2%), with businesses increasingly pointing towards inadequate enforcement of regulations as the primary source of market distortion.

Nearly one quarter of respondents believe that businesses failing to comply with existing laws and regulations enjoy an unfair competitive advantage, while others highlighted competition from public entities and inconsistent enforcement.

Compared with previous quarters, concerns regarding the processing of Third Country National (TCN) visa applications and inflation have increased again, reflecting continued pressure on businesses trying to recruit workers while managing operating costs, the Chamber said.

The Chamber also said that concerns relating to transport costs and the international crisis situation have declined significantly since Q1 2026.

When it comes to issues which require government action, businesses ranked overpopulation as the most important issue, with concern increasing further compared with previous quarters.

At the same time, safeguarding quality of life and improving the ease of doing business registered some of the largest increases in importance, indicating that businesses are increasingly seeking a better balance between economic growth, public services and the overall business environment.

While good governance, inflation and corruption remain important concerns, all three registered lower levels of concern than in the first quarter of 2026.

The survey was based on responses from 402 businesses operating in Malta collected between 1st and 22nd July 2026. The survey provides an important snapshot of business sentiment, operational challenges and national priorities among Malta's SMEs.