A shutdown of all non-essential shops and services in March affected businesses worse than closures that were ordered in the first year of the pandemic, a new survey has indicated.

The Malta Chamber of SMEs survey of 250 business owners showed 47 per cent believed the closures this year were "worse than last year" because they were in a weaker position.

It also flagged "worrying trends" related to employees' mental health. Owners said 60 per cent of their employees reported mental health issues, with 14 per cent saying this was negatively impacting business.

On March 10, after a record numbers of COVID-19 cases, the government ordered the closure of non-essential shops and services including hairdressers, barbers, beauty shops, clothes shops, furniture and jewellery shops, toyshops and florists.

They were allowed to reopen again on April 26. 

Almost half of businesses said the shutdown in 2021 was worse than the first year of the pandemic

The survey, carried out between May 10 and 18, asked business owners how they would describe the experience of being closed during 2021.

Almost half, 47 per cent, said that because they were in a “weaker position” due to closures ordered in 2020, March’s shutdown was “even harder”. 

A quarter of the respondents said the impact was comparable to 2020 while 11 per cent claimed there was “confusion” because some were unsure if they were allowed to open or not. This, they said, led to unfair competition because others “opened regardless”. 

A further 13 per cent said they were able to continue with their business through their online platforms. 

'Very slow' business

On the days following the reopening last month, almost 40 per cent said business was “very slow” while 27 per cent said it was “slow”.  A further 34 per cent said business was satisfactory. 

Meanwhile, the majority of business owners (59 per cent) said they did not make use of the government’s tax scheme at any point since the start of the pandemic. A further 30 per cent, opted for the scheme while 11 per cent claimed to not know about it. 

Of those who made use of the scheme, over half (52 per cent) said they have started paying repayments while 22 per cent plan to start paying “later this year when business restarts”. 

A further 17 per cent, however, said they are not sure when they will be in a position to start repayments while nine per cent said it will “surely not be before the year 2022”.

Cash flow issues

Asked what their biggest concerns were, owners flagged sales levels (19 per cent), cash flow issues (15 per cent) and uncertainty (14 per cent). Other problems included problems in collecting payments, employee wages, difficulty in paying commitments, rent and banking issues. 

If the situation remains unchanged, a quarter of businesses said they would only survive up to six months while 21 per cent said they would make it for a period of up to 12 months. A further 38 per cent would make it for longer than 12 months. 

Others, however, said they would only last a few months, with 13 per cent saying they would only survive up to three months and four per cent said they would have to close in a month’s time if their situation did not improve. 

On recovery, 23 per cent said they are still unsure of when they envisaged recuperating while 19 per cent said recovery has started.

Mental health 

Asked about the high percentage of people reporting mental health concerns, CEO Abigail Mamo said that although the mental health issues were inevitable,  the problem has to be “seriously addressed”.

“This is an illness that will not go away once the pandemic is over and so we need to work on addressing this. It’s in everybody’s interest to do so because one’s mental health will definitely impact their work,” she said.

The survey had a five per cent margin of error.