Business thrives on consumer confidence, often described by the catchall phrase feel-good factor. When uncertainty sets in, people postpone their spending decisions until normality returns. In the last few weeks, political instability, civic protests and power supply disruption affected the mood of people at the end-of year-sales peak.
This fall in consumer confidence is reflected in an annual survey conducted by the Malta Chamber of SMEs. A fifth of businesses blames the political crisis for the fall in sales during the Christmas period. The revelations of the sordid involvement of politicians and their business accomplices in the murder of journalist Daphne Caruana Galizia dented the feel-good factor that is behind most spending decisions by consumers.
Other factors that compounded this crisis of confidence included chronic business debilitating issues like increasing competition, falling spending power of some consumers, illicit trading and unfair competition and parking problems. The disruption in the power supply that was quite frequent at the end of the last year added to the knock-on effect on consumers’ confidence.
Some businesses seem to be better prepared than others to face the uncertainties that crop up from time to time. Over a third of respondents to the survey reported higher sales. They attribute this to improved business strategies, efficiency and products and services.
Such surveys are a snapshot of business sentiment at a particular time. They usually represent the varying perspectives of the whole business community even if they are based on a representative sample. The monitoring of the sentiment of both retailers and consumers is an essential tool to guide policymakers on what needs to be done to optimise trade.
The chairman of the Valletta Cultural Agency, Jason Micallef, once again resorted to partisan political rhetoric when he tried to rubbish the findings of the Chamber’s survey by labelling it as “a lie”. While he did not point out any specific flaw in the methodology used in the survey, he raised unsubstantiated doubts about the scientific basis for the collection of data.
Bullying a business NGO that tries to establish the facts that are affecting its members is most inappropriate, especially when it comes from a politically appointed custodian of our capital city’s culture. The business community is by no means perfect. But it renders an essential service to consumers just like other communities that serve the public.
Political spin will never be enough to desensitise public opinion worried about issues that could affect its wellbeing. Bringing destabilising elements to the surface is the best way to defuse the concerns they create in the minds of most people. Malta has still a long way to go to restore confidence in its political system. We need to do this not just for the sake of improving our image internationally but, more importantly, to restore the trust that locals must have in the way they are being governed.
The journey to restore this trust has started. There will undoubtedly be some false steps. But, hopefully, the reputational damage caused by some rogue politicians and businesspeople will be repaired in the medium term. It is, therefore, essential to keep monitoring the mood of people through surveys similar to that carried out by the Chamber of SMEs to gauge progress on the return to normality.