More than half of businesses reported an increase in their selling prices during the second quarter of 2023, the Central Bank of Malta (CBM) said on Thursday.

In a statement, the CBM said that over half of firms (53%) reported an increase, 11% more than the first three months of the year.

The rise in prices was mostly prevalent in the wholesale and retail sectors.

Meanwhile, less than half of businesses (46%) expect an improvement in short-term business activity, two points less than last quarter.

However, as prices go up, costs seem to be going down  - fewer businesses noted a rise in input costs over the same period due to improved supply chain conditions.

In the same period, just over a third of businesses reported a decline when it comes to business conditions - seven points down from the previous quarter (41%). Despite this, firms are still looking to expand their rosters.

The number of firms planning to add to their staff increased by 15% since the last quarter, CBM said, bringing the percentage up to a net 61%. However, companies are still concerned about skilful labour shortages and pressures to increase wages, it added.

The industries looking to expand their employee base include the trade and services industries.

Looking ahead, the CBM said more firms are looking to grow their investments. 

Around 62% of businesses are planning to invest more in all sectors except for real estate and construction.

Over half of these businesses claimed that they will finance the investments themselves, while only 17% admitted that they will be financed through bank facilities.

“Our business dialogue for the second quarter of this year tells us that the private sector is still bullish towards further investment and employment in spite of deteriorating business conditions and rising input costs,” CBM governor Edward Scicluna said in a statement.