Only just over half of Malta’s employers were optimistic about the post-COVID-19 recovery, with the rest saying they saw a bleak future for their business, a survey has found. 

Conducted by the Malta Employers’ Association among 253 its members, who together employ in excess of 30,000 workers, more than a quarter of respondents said they feared it will take more than 18 months for their business to return to pre-COVID-19 levels. 

MEA director-general Joe Farrugia said it was worrying that only half saw some form of light at the end of the tunnel and warned of more layoffs in the coming months. 

“The next three to four months are crucial for businesses and this is why we have urged the government to retain the wage supplement because while most companies said they were eating away at internal reserves, this cannot happen for a prolonged period,” Farrugia told Times of Malta. 

In reply to a question about the future, a third said they had no idea what the future would hold and 13% were very negative, saying they saw absolutely no chance of recovery for their business. 

On the time it would take to recover and reach pre-Covid levels, more than a quarter said it would take more than 18 months while another quarter said it would take between a year and 18 months. Another 23% saw recovery within eight to 12 months. 

A total 87% of survey respondents reported a loss of business during this pandemic, 3% said they saw increased business while 10% said that the pandemic had no effect whatsoever on their business. A third of those who reported a loss in business said their loss was greater than 75%. 

When asked about their expectation on these losses, 42% said their losses would remain unchanged while 32% said they expected to see a decrease in their losses.

Most of these businesses were in the hospitality, manufacturing and professional services sectors. A fifth were negative about their losses, saying they expected these to worsen rather than improve. 

Asked how they were managing their losses, businesses said they had introduced some form of cost reduction measures, with some of them resorting to redundancies.

The 9% who said they had resorted to redundancies in the April survey increased to 17% in this survey, with 88% of them saying they had laid off up to a quarter of their staff. Two per cent made more than three-quarters of their staff redundant. 

Almost half of the respondents said they were still undecided on whether to resort to redundancies over the next three months while 20% said they were planning redundancies, with 60% saying they will make redundant up to 20% of their remaining workforce. 

Three-quarters of respondents said they had decided to postpone their planned investment projects. Only 28% of them said they will reactivate this investment once the situation improves while just over a quarter said they had written off this investment completely. 41% said they were undecided. 

Asked about the reopening of schools and childcare centres, most companies said this was very important for their businesses as most of their employees could not go to work because they had to stay with their children. 

Farrugia said that while the survey was carried out before the latest economic package was announced earlier this week, this help was “timely” and will help businesses to not a small extent. 

He said he expected more assistance for a wider variety of businesses. The financial assistance given to the construction industry to invest in greener equipment should have been opened for more sectors, he said. 

“The intervention was timely but the reduction of the wage supplement was premature. The next four months are crucial. We expected measures to continue mitigating the impact of this crisis and wage supplements should be kept until business recover,” Farrugia said. 

The Malta Chamber also welcomed the government's latest economic incentives, saying they largely mirrored their proposals.

“We are looking forward to the government's plan in implementing a low carbon strategy while we are highly appreciative of the investment in industrial infrastructure of €400 million to attract new investment in both traditional industries such as Manufacturing and emerging industries,” Chamber President David Xuereb said.