Updated March 10

Malta could face a shortage of manual labourers in the absence of more migration or policies that counter the ageing of the workforce, the Central Bank has warned. 

This situation exists despite the influx of migrant workers, a policy paper has concluded. 

The paper, by the bank’s chief economist Aaron Grech, is on the impact of the pensions reform enacted in 2006, through which the age of retirement was raised to 65. 

The paper reports a dramatic improvement in the female employment participation rate over the last decade. 

While in 2005, half of women under 40 years were in employment, by 2018, this rate had gone up to nearly three-quarters, exceeding the EU average. From being a country with the lowest female participation rate, Malta now boasts the fifth-highest one in the EU, the paper noted. 

However, despite this trend and the increase in migration, some sectors of the economy are set to be impacted by the ageing workforce. The data suggests it is likely that public administration, agriculture, construction and manufacturing will face significant labour shortages once their workforce retires, the paper says. 

The number of full-time male workers over 50 rose from 26,000 to 33,000 between 2008 and 2018. The increase in this age group was even more pronounced among women, with a doubling to 14,000. 

The increase in retirement age rolled out gradually from 2012 meant that 3,500 more workers aged 50 and over remained in the workforce. 

The reform resulted in a 1.3 percentage points increase in economic growth, which was 45 per cent better than forecast in 2017. 

The study also found that the number of workers aged between 60 and 62 increased from 1.6 per cent to 2.6 per cent of the overall workforce between 2011 and 2018.