The number of building-related companies continues to increase with each passing year, although different sets of statistics paint divergent pictures of the size of the sector. Report: Julian Delia
While National Statistics Office (NSO) figures indicate that there were 8,980 construction-related business units in 2019, data held by the Malta Business Registry lists 125 companies engaged in construction-related activities last year.
Figures held by construction lobbyists, the Malta Developers’ Association (MDA), indicate just over 600 operators in the sector, who have become members, all of them being either contractors or developers.
The differing figures, a result of each entity measuring sectoral operators in a particular way, shed light on the challenges of quantifying business activity in a sector that remains loosely regulated, despite being a main economic driver .
The NSO figures point towards an overall 12 per cent increment in the number of business units grouped under the NACE category for construction from 2017 to 2019.
The number of registered firms engaged in construction-related activities has increased fourfold over the past five years, according to the Malta Business Registry (MBR).
While the NSO’s dataset provides insight into the amount of business units in general – not just registered companies but also sole traders or partnerships – the MBR’s zeroes in on the amount of operators functioning as companies.
The most dramatic increase in numbers occurred from 2015 to 2016, jumping from 29 to 98. The year 2018 saw a peak of 141 registered construction companies, with the number gradually going down to 125 by 2020.
A spokesperson for the MBR stated that the data was gathered as a conservative estimate, which meant that companies that had not provided enough detailed information about their operations were excluded from the count.
“We have grouped responses to your query about the number of construction companies based on the data we have available. We also tried to avoid multiple search hits from companies belonging to the same proprietor,” the spokesperson said.
What do these numbers say?
Using the NSO statistics as the basis for the organisation’s comment, Chamber of Architects president Andrè Pizzuto stated that “there is a significant acceleration in the number of business units operating within the construction, quarrying and real estate industries being registered”.
He lamented the ease with which one can register a business unit, pointing out that this has led to an increase in operators in the field which lack “required knowledge, skills, awareness of risks and understanding of health and safety on construction sites”.
“Architects experience this on a daily basis in the rapid decline in the quality of the workmanship, lack of understanding of roles on sites and disregard or challenging of instructions provided on site,” he explained.
Pizzuto also took aim at unlicensed operators, repeating the chamber’s oft-uttered position which states that “contractors should be able to demonstrate their skills through a licensing and classification regime”.
“Malta’s construction industry needs to transform into a supporting industry, serving the rest of the economy rather than serving itself. This is essential for us to achieve sustainable development,” Pizzuto said.
The MDA weighed in on the MBR’s findings.
“The MDA represents developers, contractors, landlords, real estate agents and the renewable energy sector. We have over 1,000 members of which over 600 fall within the developers or contractors’ section,” MDA president Sandro Chetcuti stated, noting that some developers or contractors might be working as self-employed.
“The private market responds to the market’s demands,” Chetcuti added.
“According to various economic studies, the construction industry is one of the main contributors to the economy.”
Moviment Graffitti noted that “the figures confirm an unsustainable increase in the volume of construction work”.
“Unsustainable construction work is the main reason for the loss of quality of life of residents,” a spokesperson for the NGO said, adding the government insists on clearing the way for the developers’ lobby instead of reforming and regulating the sector.
“Considering the increase in the number of companies, the boom in planning permits and the amount of vacant properties in the country, unbridled construction is the result of free-market policies,” the Graffitti spokesperson aid.
“Our land is solely being used as a vehicle for profits, not for the citizens’ need for accommodation and recreational spaces.”