The 2013 edition of the EY Attractiveness Survey for Malta shows that 88 per cent of respondents believe Malta remains attractive for foreign direct investment, up two percentage points over last year.
However, of the 91 companies surveyed, all of which are majority foreign-owned, only 53 per cent have expansion plans. This figure has been declining virtually steadily, from 72 per cent in 2009.
EY also prepare a European Attractiveness Survey and it noted that the resurgence in confidence in Europe’s ability to overcome the crisis of the past few years had a similar impact on confidence in Malta, with 93 per cent saying they were confident Malt would also survive.
The survey found other positive trends. While in the 2012 survey, 11 per cent of respondents said Malta was not attractive for FDI, this figure went down to 3 per cent this year.
EY noted other longer term trends, with 63 per cent saying that Malta would remain attractive for FDI over the next three years, up 5 per cent from 2012 but still lower than the 71 per cent in 2011. Almost two-thirds of respondents say they still see themselves in Malta in 10 years’ time with roughly a third saying they would not be.
The respondents were asked which sectors would drive Malta’s economy in the future, with the top five being financial services, ICT, business-to-business services, pharmaceuticals and biotechnologies, and creative industries – much in line with the Government’s own vision.
However, 13 per cent of respondents also pointed to logistics as being a potential growth area, seeing Malta as a hub between Europe and North Africa.
The survey also asks respondents where they would like to see improvement, with transport and logistics infrastructure and telecommunications emerging on top of the list, although 20 per cent of the respondents noted improvement from the previous year in telecommunications and productivity A third said labour costs had gone up noting, however, that Malta was still competitive.
The main factors which make Malta attractive have changed over the years. This year, the stability of the social climate, of the political, legal and regulatory environment, and corporate taxation ranked highest.
The respondents were also asked what new factors should be considered to make Malta more attractive. Those within the control of Government were the control of public finances, and easier employment procedures for non-EU national, particularly within areas such as IT. For the private sector, the demand for commercial premises was cited, while for human resources, the lack of skilled individuals was raised.
AT A GLANCE – European competitiveness
Europe remains the world’s top destination for FDI, although at 22.4 per cent this is 6 points lower than in 2011.38% of companies interviewed are planning to invest in Europe next year.75% remain confident about Europe’s ability to overcome the current crisis. The risk of an imminent eurozone break-up, which weighed heavily on business confidence in 2012, has been averted.39% of investors believe Europe’s appeal as an investment destination over the next three years will improve.