News - News Releases 2025
24/01/2025 08:57:00
Central Bank of Malta Business Dialogue Publication – First edition of 2025
The latest business dialogue held between the Central Bank of Malta and non-financial corporations shows that in the fourth quarter of 2024, the net share of firms reporting better business conditions weakened when compared to the previous quarter - from 15% to 9%.1 Yet, most firms maintained stable levels of operations despite cost pressures. Manufacturing and service-oriented firms continued to report an expansion in activity, while others, particularly retail and wholesale and construction, faced pressure due to subdued consumer demand.
Looking ahead, companies in Malta were more optimistic about future business activity than they were about recent performance, as a net 20% of firms expected an improvement in short-term business activity. This was, however, lower than the 37% observed in the preceding quarter. Construction and real estate firms exhibit the least favorable outlook. Business expectations improved among retailers, who foresee seasonal demand increases, while a similar proportion of manufacturing firms as in the previous quarter continue to expect growth. In the services sector, conversely, the net share of firms expecting an improvement in activity more than halved.

The net share of companies reporting higher input costs increased. Indeed, a net 69% of contacts reported that input prices have increased in recent months, up from 63% in the previous period. The net share of firms reporting higher selling prices, however, stood at 29% in the fourth quarter of 2024, down from 41% in the preceding quarter. This was the lowest proportion since the third quarter of 2021.
The net share of firms planning to invest more rose to 27%, from 0% in the previous quarter, driven by a focus on sustainability and digitalization. Replies about employment plans point to a similar pace of job creation as in the third quarter, with a net balance of 24% compared to 22% previously. Nonetheless, labour shortages persist.
This publication also incorporates a box providing insights into cost changes and company profitability over the past two years. The share of companies reporting higher profits in 2024 is more than double that in 2023. In fact, 29% of companies interviewed in 2024 reported higher profits compared to 14% in 2023. Maltese companies adapted their strategies to deal with economic challenges, with replies showing that for several firms selling price increases were effective in achieving higher profits or at least maintain stable profit levels. However, more than a third of firms were also able to increase their profits without changing prices, likely by reaping efficiency gains or sourcing cheaper products.
The full publication is available here. The Business Dialogue survey can also be accessed in a new and interactive way through its dedicated dashboard.
1 The views expressed are solely those of the companies interviewed and do not necessarily reflect the views of the Central Bank of Malta.
Back to Archive