Malta is one of eight EU member states in which employment and value added in small and medium-sized enterprises have recovered fully and even surpassed 2008 levels.
The ‘front runners’ group comprises Germany, Austria, Sweden, Belgium, Malta, Luxembourg, the UK and France.
The generally strong value-added growth experienced by the countries in this group is not matched by equally strong employment growth. Only German SMEs posted an employment level higher by 10 per cent or more in 2013 than in 2008, the European Commission reported.
At the other end of the scale are Greece, Spain, Portugal, Croatia, Cyprus, Ireland, Romania, Slovenia, Hungary, Latvia and Hungary. In these countries, the level of value added generated in 2013 by SMEs was at least 10 per cent below 2008 levels.
The results emerged from the SMEs Performance Review, which analyses the progress European countries make in implementing the Small Business Act (SBA), and is issued on a yearly basis by the European Commission.
It found that in 2013, economic conditions remained challenging for SMEs in most member states. Economic results suggest there is a recovery, but it is uneven and not following a robust trajectory. In 2013, the numbers of SMEs and their value added stood above pre-crisis levels of 2008, but SMEs’ employment was still some way below that mark since it was down by 1.9 million employees, 2.16 per cent below the 2008 level.
SMEs in construction and manufacturing suffered most from the crisis, with a persisting cumulative value-added decline from 2008 to 2013 of -22 per cent and -2.9 per cent respectively, while business services, as well as information and communication and real estate sectors proved most dynamic in surpassing their respective pre-crisis levels by the highest margins of seven per cent, nine per cent and 15 per cent respectively.
Malta´s economy has weathered the crisis of recent years fairly well, and so too did the Maltese SME sector. Over the period 2008-2013, the number of SMEs increased by 4,800 (or almost 20 per cent to a total of 28,905 firms), and value added grew at a rate of 16.7 per cent.
SME employment also expanded during 2008-2013, but slightly less forcefully. Between 2008 and 2013, SMEs added almost 7,000 net jobs to reach a total of some 98,000, an increase of 7.7 per cent over the entire period.
The expansion of Malta’s SME sector took place against the backdrop of an SBA profile for the country that has not changed much over the past year. The country scores above the EU average only for the ‘single market indicator’, and in four – ‘second chance’, ‘state aid and public procurement’, ‘skills and innovation’, and ‘internationalisation’ – Malta has to catch up with the average.
In total, Malta implemented only five significant policy measures addressing three of the 10 SBA policy areas in 2013. There was not a single area where Malta achieved significant progress in 2013, the Commission said.
“The positive trends in SME employment and value added should not give rise to complacency. On the contrary, shortcomings in the various SBA areas, in particular ‘think small first’, skills and innovation, and internationalisation, should be tackled with swift action, for example by full implementation of all provisions of Malta’s Small Business Act of 2011,” it concluded.
Preliminary estimations for 2015 indicate an increase of some 1,500 new SMEs in Malta with a net employment increase of almost 4,000. Value added is also set to expand.