Updated 12.15pm with PN reaction below

Over half of fashion retailers and restaurants could consider scaling down operations and making employees redundant if the current “stressed” level of business persists in coming months, according to a PwC barometer.

Existing and anticipated drops in sales and clientele, as well as a termination of the COVID-19 support schemes, are the topmost concerns of 89 per cent of business, it finds, showing the reliance on the government of two of the hardest-hit industries in the pandemic.

Another concern identified by half the 100 respondents interviewed in October – all of whom reported a drop in business during the previous six months – is the maintenance of bank financing repayments once moratoria expire, according to PwC Malta’s Middle Market Barometer.

The outlook for the next half a year is “bleak”, especially among restaurateurs, with only five per cent of those interviewed having a positive view, 30 per cent anticipating a stable level of business and the majority, 64 per cent, braced for a sharp downturn.

Retailers in the clothing business are marginally more upbeat, with 21 per cent anticipating a recovery in business in the next six months.

However, the overwhelming majority, at 67 per cent, have a negative outlook for the months overlapping the festive period, which are, traditionally, an intense period for business.

Having said that, in PwC’s June barometer, the negative feeling was more pronounced at 87 per cent and “could suggest the economy is absorbing the favourable effect of government support measures and anticipation for vaccine approval, which should contain the pandemic”. 

While government support for industries under stress is vital at this juncture, the innovation of business processes and economic diversification on a macro-level are the key factors that should shape the strategic economic rebound plans for the medium and longer term, PwC Territory senior partner, David Valenzia,  said, commenting on how the pandemic exposed the fragility of these particular industries.

The restrictive measures of the past months have accelerated investment in digital supply channels, with an “encouraging” 71 per cent of businesses, which recalibrated processes to adapt to the new circumstances, suggesting initiatives taken in June were positive.

In that barometer, 59 per cent had stated that the circumstances pushed new business initiatives on digital platforms.

Retail fashion operators, at 76 per cent, edge restaurant owners in commenting positively on the leap into digital markets, the latest barometer showed. In another “signal of resilience”, 69 per cent of the participants indicated that further plans for investment in digital and innovative business initiatives are in the pipeline.

Owners of retail fashion outlets, at 92 per cent, demonstrate the strongest resolve in reshaping the trajectory of their business distribution channels by further investment in digital platforms.

Government assistance schemes should be extended to June- PN 

In a reaction to the survey, the Nationalist Party said that in order to give peace of mind, the government should extend its business assistance schemes, including the wage supplement, to June. 

Details on the new vouchers' scheme should also be announced immediately.  

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