Rising costs will lead 42% of businesses to increase their prices in the next 12 months, a survey commissioned by the Chamber of Commerce has found.

Just over half of businesses expect prices to remain the same, and just six per cent envisage a drop in prices.

The top concern for businesses for the final quarter of 2021 was restoring profitability, Chamber president Marisa Xuereb said.

The survey, carried out by Vistage, gathered data from 129 respondents from the local business community taken during September. 

Optimism among businesses in Malta has fallen after a surge in June, the survey found.

The proportion of local business leaders who expect the economy to improve in the next 12 months dropped from 64% to 25%. 

According to the business lobby, the “rising costs of everything” is having an impact on the economy. 

The proportion of businesses in Malta that expect increased profits in the year ahead fell from 51% in the third quarter to 26% in the fourth.

Among the rising costs, respondents cited freight prices, salary costs and substantial increase in prices of raw materials and components.

These cost pressures are leading 42% of the businesses surveyed to increase prices in the next 12 months.

Times of Malta has reported how supermarkets and suppliers are seeing some “super increases” in prices, and fingers have pointed squarely at fattened-up freight costs, with COVID-19 and Brexit to blame.

The survey also continues to highlight the challenges faced by businesses to hire workers. 

This talent scarcity is not only causing challenges in delivering products and services on time, it has bottom line implications as many businesses are raising wages to be competitive, the chamber said. 

The survey comes days after Finance Minister Clyde Caruana announced a new national employment policy aimed at equipping workers with the necessary skills to earn a better income while acknowledging the need to attract foreign labour. 

The policy document highlights how Malta’s employment rates are at an all-time high.This means the focus must now shift towards improving work skills to allow them to earn higher incomes.

On the COVID-19 front, over a quarter of businesses said it is mandatory for their employees to be vaccinated, while a third said they are considering making taking the jab mandatory.