The net share of non-financial corporations reporting better business conditions in the last quarter of 2023 dropped to 35% from 44% in the previous quarter, a Central Bank of Malta report shows.

On balance, conditions were less positive than before across most economic sectors, except in services where conditions improved, the bank said in a statement.

Looking ahead, a net 42% of firms expected an improvement in short-term business activity - again, lower than the 47% in the preceding quarter.

The net share of companies reporting higher input costs has rebounded to the level reported in the second quarter of 2023: a net 60% reported that input prices increased in recent months.

Meanwhile, the net share of firms reporting higher selling prices stood at 50% in the last quarter of 2023 - two percentage points higher than in the previous quarter.

In the quarter under review, the net share of firms planning to invest more this year decreased significantly to 15% from 50% in the third quarter.

The net share of firms planning to increase their staff complement also decreased by five percentage points to a net 40%.

"Companies have continued to express concerns about labour and skill shortages and pressures to increase wages. Two-thirds of contacted firms expect wages in 2024 to rise by more than 5%," CBM added.