The 2010 business sentiment in Malta is positive, according to the latest Eurochambres economic survey, which polled over 69,000 businesses of all sizes and sectors in 27 countries.
Eurochambres is the Association of European Chambers of Commerce and Industry.
The report on Malta states that while the mood for 2009 took a deep dive because of the effect of the global economic situation, the mood for 2010 is "more sober" and that while the mood is nowhere near that recorded in recent years "the business sentiment turns positive for next year".
The reports states: "Turnover, sales locally and abroad, employment and investment are seen growing on balance. They are comparatively modest in terms of those projected last year, but in the circumstances this fact is encouraging. It means that business is taking stock, re-considered its expectations, but seems prepared to resume moving forward."
It adds: "Given that the mood at present is very much contained, it could well be that businesses are ‘sober' in reviewing their plans for 2010, and therefore, their envisaged value for turnover, sales, employment and capital growth in 2010 are shorn of enthusiastic euphoria that is usually boosted by buoyant entrepreneurial spirits".
The survey highlights the fact that Malta's manufacturing sector in 2009 registered a major u-turn in business sentiment. "Rather than the consolidation / upswing that was being seen in 2008, the performance of manufacturing in 2009 was dismal on all fronts," it said. However, it points out that business sentiment for 2010 is slightly better in the manufacturing sector than for the whole economy, adding that a more encouraging scenario is anticipated for manufacturing exports.
"Again, the strong positive sentiment that was recorded a year ago has been stalled in 2009. But a resumption of looking ahead positively may be underway," the section on manufacturing says.
Malta's services sector was described in the survey as being "subdued" compared to past years.
"In 2009 and 2010 this wide array of economic activities seems to confirm this impression.... It seems that this sector may be heading towards a period of slower expansion in the respective sub-sectors or in introducing new activity, with the result that its role will assume a new significance in the near future," the report points out.
The survey highlights the difficult period the Maltese economy is passing through following the global financial crisis. "Malta registered quarterly contractions in its gross domestic value added. At the same time it recorded relatively high average price increases, rising fiscal deficits and a national debt and negative external balances," it says.
There were 218 respondents in the Malta survey, 55 per cent of whom are exporters of goods and services while the remaining 45 per cent cater for the local market. Twenty-eight per cent are manufacturers and 72 per cent are service providers.
On a Europe-wide level businesses in Europe expect to invest and employ less in 2010 than at any time in the last decade, according to the survey. "Also turnover and export forecasts are at their lowest level since 2000, while businesses do not anticipate any changes in domestic sales for the coming year," it says.
Arnaldo Abruzzini, Secretary General of Eurochambres, explained: "Businesses are afraid to invest. They don't see domestic sales growing, they suffer from unfavourable exchange rates which hamper their exports and, as a result, they are unwilling to invest and to employ. It is premature to say in light of these facts that the worse is already behind us."