A survey carried out by the Chamber for Small- and Medium-Sized Enterprises - GRTU among its members has shown that 64 per cent of retailers believe the
business prospects for the Christmas season are either bad or very bad. Only 25 per cent said the prospects were good while 8 per cent said they were uncertain. Nobody said the prospects were very good.
Furthermore, 36 per cent of respondents said they were considering reducing the number of employees while 49 per cent said the business prospects over the next six months were negative.
The reasons given for these poor prospects over Christmas were a lack of client confidence due to an increase in expenses (31 per cent), a decrease in purchasing power (24 per cent), the revised utility tariffs (18 per cent), the financial crisis (11 per cent), a bad budget (7 per cent), the usual slowdown in certain sectors (11 per cent), liquidity problems (3 per cent) and a lack of tourists (4 per cent). Those who said the prospects were good said this was due to
business strategies (11 per cent) or because the items sold were necessities for consumers (2 per cent).
Asked about the state of their business today, 57 per cent said it was bad or very bad, 35 per cent said it was good and 8 per cent said it was average. Nobody said it was very good. Again, the lack of client confidence (27 per cent) and the new utility tariffs (19 per cent) were among the main factors mentioned which affected business in the last six months.
Other factors pointed out were an increase in business expenses (22 per cent), wrong fiscal incentives and a lack of infrastructure (2 per cent), the financial crisis (15 per cent), the increase in fuel prices (9 per cent), liquidity problems (6 per cent), increased competition (6 per cent), unfair competition (7 per cent), lack of quality tourism (5 per cent), elections (4 per cent), negative media (3 per cent) and the introduction of the euro (2 per cent). Seven per cent of respondents said their business was affected positively by business strategies.
Questioned about the business prospects for the next six months, 49 per cent of participants said they were negative, while 35 per cent said they were uncertain. Only 8 per cent said the business prospects were positive while 8 per cent said they were stable.
Perhaps the most worrying aspect of this survey is the fact that 36 per cent of respondents said they would diminish the number of employees when asked if they were envisaging certain repercussions as a result of the economic situation. Twelve per cent said they would close some of their shops or part of their shop while 11 per cent said they would close the business. Only three per cent said they would open new shops or expand the business and four per cent said they would increase the number of employees. Forty-three per cent said they would stay the same.
The survey was conducted among 100 GRTU members involved in selling a whole range of products and services.
GRTU director general Vince Farrugia said one major concern facing the commercial sector in general in this pre-Christmas period is the state of retailing.
"This survey shows that business performance is bad and worse still, the prospects are bad. The main reason given is that business confidence is very low. This is grossly unfair because business confidence isn't something businessmen can control. There are various other inputs such as the state of the local economy and the international economic situation.
"The new utility tariffs have had an impact and so has the budget, which although not negative, was not believed to be positive. We believe that this was a result of the new utility tariffs and the wrong message sent out by the new car licences fees for example. Overall, the message is not a good feel factor but a bad feel factor. The feel bad factor is resulting in poor consumer confidence and this is very evident in the survey," he said.
Mr Farrugia said unfortunately businessmen were prepared to react to this state of affairs "and the worst thing is that they are prepared to reduce their number of employees". He said this was very worrying as the GRTU relates the state of business to the total disposable income in the country.
"People will not spend or make use of credit because they want to save for a rainy day and this is what is happening. We will have a double stroke - redundancies as a result of the international economic situation and also because of the state of the retail sector."
Mr Farrugia said the GRTU met Prime Minister Lawrence Gonzi on Tuesday to discuss the current economic situation and it proposed a number of projects that need to be speeded up, especially tourism-related projects.
"We feel the greatest support the government can give is to tourism, such as to Air Malta, the low cost airlines, as well as to the tourism product. We are in favour of refurbishments and support for localities - so some tourists will be able to find accommodation in households. We also want the help given to homes to be refurbished (such as the façade) to be extended to businesses as these are part of the whole product," he said.
Mr Farrugia said he believed the government will give importance to certain projects and he was also confident the Prime Minister was willing to find a solution over the proposed new utility tariffs.
"The message we gave to the Prime Minister was that this feel bad factor in the pre-Christmas period needs to be changed. Every day is a lost day. After our meeting with Dr Gonzi we emerged optimistic that action will be taken even though the government's financial situation is not too good.
"However we proposed ways in which the private sector can be involved using bonds that can be utilised to encourage people to keep their money in Malta through a guarantee by the state. We believe the government should not only guarantee deposits in banks but also bonds that will be used for the development of our country," Mr Farrugia said.
"I recently said the budget should be revisited in June but now I am saying that it should be revisited now. The economic situation has changed drastically since the budget was written. Malta has changed, the world has changed. The economy needs fresh money. This is the message we delivered to the Prime Minister. Consumer confidence is revived through action. The best player at this stage is the government and the government must take action," he said.
business prospects for the Christmas season are either bad or very bad. Only 25 per cent said the prospects were good while 8 per cent said they were uncertain. Nobody said the prospects were very good.
Furthermore, 36 per cent of respondents said they were considering reducing the number of employees while 49 per cent said the business prospects over the next six months were negative.
The reasons given for these poor prospects over Christmas were a lack of client confidence due to an increase in expenses (31 per cent), a decrease in purchasing power (24 per cent), the revised utility tariffs (18 per cent), the financial crisis (11 per cent), a bad budget (7 per cent), the usual slowdown in certain sectors (11 per cent), liquidity problems (3 per cent) and a lack of tourists (4 per cent). Those who said the prospects were good said this was due to
business strategies (11 per cent) or because the items sold were necessities for consumers (2 per cent).
Asked about the state of their business today, 57 per cent said it was bad or very bad, 35 per cent said it was good and 8 per cent said it was average. Nobody said it was very good. Again, the lack of client confidence (27 per cent) and the new utility tariffs (19 per cent) were among the main factors mentioned which affected business in the last six months.
Other factors pointed out were an increase in business expenses (22 per cent), wrong fiscal incentives and a lack of infrastructure (2 per cent), the financial crisis (15 per cent), the increase in fuel prices (9 per cent), liquidity problems (6 per cent), increased competition (6 per cent), unfair competition (7 per cent), lack of quality tourism (5 per cent), elections (4 per cent), negative media (3 per cent) and the introduction of the euro (2 per cent). Seven per cent of respondents said their business was affected positively by business strategies.
Questioned about the business prospects for the next six months, 49 per cent of participants said they were negative, while 35 per cent said they were uncertain. Only 8 per cent said the business prospects were positive while 8 per cent said they were stable.
Perhaps the most worrying aspect of this survey is the fact that 36 per cent of respondents said they would diminish the number of employees when asked if they were envisaging certain repercussions as a result of the economic situation. Twelve per cent said they would close some of their shops or part of their shop while 11 per cent said they would close the business. Only three per cent said they would open new shops or expand the business and four per cent said they would increase the number of employees. Forty-three per cent said they would stay the same.
The survey was conducted among 100 GRTU members involved in selling a whole range of products and services.
GRTU director general Vince Farrugia said one major concern facing the commercial sector in general in this pre-Christmas period is the state of retailing.
"This survey shows that business performance is bad and worse still, the prospects are bad. The main reason given is that business confidence is very low. This is grossly unfair because business confidence isn't something businessmen can control. There are various other inputs such as the state of the local economy and the international economic situation.
"The new utility tariffs have had an impact and so has the budget, which although not negative, was not believed to be positive. We believe that this was a result of the new utility tariffs and the wrong message sent out by the new car licences fees for example. Overall, the message is not a good feel factor but a bad feel factor. The feel bad factor is resulting in poor consumer confidence and this is very evident in the survey," he said.
Mr Farrugia said unfortunately businessmen were prepared to react to this state of affairs "and the worst thing is that they are prepared to reduce their number of employees". He said this was very worrying as the GRTU relates the state of business to the total disposable income in the country.
"People will not spend or make use of credit because they want to save for a rainy day and this is what is happening. We will have a double stroke - redundancies as a result of the international economic situation and also because of the state of the retail sector."
Mr Farrugia said the GRTU met Prime Minister Lawrence Gonzi on Tuesday to discuss the current economic situation and it proposed a number of projects that need to be speeded up, especially tourism-related projects.
"We feel the greatest support the government can give is to tourism, such as to Air Malta, the low cost airlines, as well as to the tourism product. We are in favour of refurbishments and support for localities - so some tourists will be able to find accommodation in households. We also want the help given to homes to be refurbished (such as the façade) to be extended to businesses as these are part of the whole product," he said.
Mr Farrugia said he believed the government will give importance to certain projects and he was also confident the Prime Minister was willing to find a solution over the proposed new utility tariffs.
"The message we gave to the Prime Minister was that this feel bad factor in the pre-Christmas period needs to be changed. Every day is a lost day. After our meeting with Dr Gonzi we emerged optimistic that action will be taken even though the government's financial situation is not too good.
"However we proposed ways in which the private sector can be involved using bonds that can be utilised to encourage people to keep their money in Malta through a guarantee by the state. We believe the government should not only guarantee deposits in banks but also bonds that will be used for the development of our country," Mr Farrugia said.
"I recently said the budget should be revisited in June but now I am saying that it should be revisited now. The economic situation has changed drastically since the budget was written. Malta has changed, the world has changed. The economy needs fresh money. This is the message we delivered to the Prime Minister. Consumer confidence is revived through action. The best player at this stage is the government and the government must take action," he said.