The fact that 37% of family businesses in Malta reported higher turnover but lower profits between 2022 and 2025 should be a cause for concern. It is an indication that growth in sales does not necessarily translate into greater financial strength, and that many companies are finding it increasingly difficult to convert commercial activity into sustainable returns.

The findings of the Malta Chamber of Commerce's Family Business Survey 2026 are particularly striking when considered alongside the fact that 92% of respondents reported rising turnover over the three-year period. While this suggests that demand and business activity have remained relatively strong, the benefits are clearly not reaching the bottom line in a significant proportion of companies.

Turnover is an important measure of commercial activity, but it does not tell the whole story. A company can sell more goods and services, employ more people and serve a larger market while becoming less profitable. When costs rise faster than revenues, growth can become an increasingly difficult exercise rather than a route to greater financial security.

The problem appears particularly pronounced among businesses involved in importation and distribution, where 41.1% of respondents reported higher turnover but lower profits. The Chamber attributes this to competitive and inflationary pressures. Mid-sized firms are also struggling, with rising overheads potentially outpacing the efficiencies that expansion is supposed to deliver.

These findings should not be interpreted as evidence that Maltese businesses are failing. Rather, they highlight the pressures under which companies are operating and the need to ensure that the conditions in which they trade allow them to grow sustainably.

Businesses must, of course, take responsibility for their own performance. The survey makes a compelling case for better strategic planning, stronger governance, improved financial reporting and investment in digitalisation. Companies cannot rely indefinitely on informal management arrangements or assume that higher sales will automatically produce higher profits. Professional management and operational efficiency are essential, particularly as businesses expand.

However, the responsibility does not rest with businesses alone. Government policy must recognise that a healthy economy depends not simply on the volume of economic activity but also on the financial resilience of the companies generating it.

Businesses need a stable and predictable operating environment, proportionate regulation, efficient public services, and policies that do not unnecessarily increase the cost of doing business.

This matters because profits are not merely a reward for business owners. They provide the means to reinvest, adopt new technologies, train employees, improve productivity and withstand economic shocks. Persistently squeezed margins weaken that capacity and can ultimately threaten jobs and investment.

The Chamber's survey does not establish that any single factor caused the deterioration in profits. It does, however, expose a problem that policymakers and business leaders should not ignore.

Malta needs businesses that expand, innovate and compete. But it also needs businesses that can retain enough of the value they create to remain viable and invest in their future.

Economic growth that leaves a substantial proportion of companies selling more while earning less is not a result that should be accepted without scrutiny.