In the third quarter of 2023, 44 per cent of firms reported better business conditions, up from 34 per cent in the second quarter of the year.

This was one of the main findings of the latest business dialogue held between the Central Bank of Malta and non-financial corporations. Looking ahead, 47 per cent of firms expect business activity to improve in the short term, marginally higher than 46 per cent in the preceding quarter.

Firms report that the pressure of costs has eased considerably due to improved supply chain conditions but remains higher than in the past. Indeed, a net 46 per cent of firms report that input prices have increased in the past three months, lower than 62 per cent in the previous quarter.

Most firms expect unit costs to remain stable or increase further over the next 12 months. However, some said they were unable to give a prediction in this regard due to the high level of global uncertainty.

Many firms expect wages this year and next to rise by over five per cent

On the negative side, 50 per cent of firms said they planned to increase investment in the third quarter, down from 62 per cent in the second quarter.

Companies also expressed concerns about labour and skill shortages and pressures to increase wages. Indeed, many firms expect wages this year and next to rise by over five per cent. The net share of firms planning to increase their staff complement fell by 16 percentage points, to a net 45 per cent.

In the third quarter, 48 per cent of firms said they were able to sell their products at higher prices, down from 53 per cent in the previous quarter.

The fourth edition of the central bank's business dialogue survey report may be viewed at this link. It can also be accessed in a new and interactive way through the CBM’s dedicated dashboard.