Updated 5.04pm with Jason Micallef comments -

A fifth of businesses said political and economic instability was behind a fall in sales last year, according to a survey by the Malta Chamber of SMEs (formerly the GRTU).

The political crisis following the investigation into the Daphne Caruana Galizia murder investigation at the end of 2019 coincided with one of the busiest shopping periods.

It was pinpointed as a key reason for lost sales by 21 per cent of 300 businesses who took part in the Chamber's Business Performance Survey.  

Other factors for a drop in sales were seen as significantly less important. These included increased compensation (14 per cent), a decrease in customer spending power (10 per cent), illicit trading and unfair competition (10 per cent) and parking problems (nine per cent).

Some eight per cent of businesses reported a drop in sales due to the nationwide power cuts caused by the damaged Sicily-Malta interconnector.

The survey also found that over a third of businesses (38 per cent) felt their profits were worse in 2019 than the previous year. 

These numbers come following a period of political turmoil towards the end of last year, when businessman Yorgen Fenech, who had links to top government officials and ministers, was arrested and charged in connection with the murder of Daphne Caruana Galizia.

The Chamber of SMEs projected that the economic problems which resulted from the political instability and the power outages, would begin to turn around in the New Year. 

However, Abigail Mamo, president of the Chamber of SMEs also warned that said some of the same pressures remained. 

"What we have seen is that the things that happened, the political situation at the end of the year has affected and dented business performance for the whole of 2019," she said.

"We need to be better prepared for these kind of issues that we are still facing unfortunately today. In 2020 businesses are optimistic but there is concern in relation to the political scenario, which has still not settled." 

Valletta businesses are reported to have been the most dissatisfied about their sales during the Christmas period.

The Chamber’s survey shows that 40 per cent of Valletta businesses were dissatisfied with their business sales over Christmas. That compared with 21 per cent of businesses in the rest of the country.

Overall, the festive season saw an increase in the number of businesses dissatisfied with their sales on previous years. 

 

While there were falls in profits and an increase in those with a worse performance in 2019, there were respondents who reported increased profits connected to a higher turnover. Over a third said they saw an increase connected to a higher turnover (34 per cent).

Others attributed their increases to improved business strategies, increased efficiency and products or services which generated more money (14 per cent respectively). 

 

Valletta agency head denies Valletta business dip, questions survey

Jason Micallef, Chairman of the Valletta Cultural Agency, in a Facebook post said it was 'a lie' that there had been a dip in business in Valletta in December. He also lashed out at Abigail Mamo, saying she was consistently negative about the way businesses was going.

Business in Valletta in December has maintained the rhythm it had picked up since 2014, he said.

Mr Micallef also raised questions about the survey, asking who had conducted it, who was questioned and how many members the Malta Chamber of SMEs actually had in Valletta.  "I suspect that the replies to this survey do not actually exist," he said.

Chamber says Micallef’s comments are misguided

The Chamber in a reaction to Mr Micallef stood by its survey findings and said it could feel the pulse of business because that was its role and function.  

“Shallow attempts to exert pressure on social partners and attempt to interfere in the work they do shows very poorly on a person occupying his position,” the chamber said.

It invited Mr Micallef to see the survey results.