25/04/2025 08:28:00

Central Bank of Malta Business Dialogue Publication – Second edition of 2025

The latest business dialogue held between the Central Bank of Malta and non-financial corporations shows that in the first quarter of 2025, the net share of firms reporting better business conditions reached 15%, from 9% in the previous quarter.¹ Service-oriented firms had the net highest share of firms reporting expansion in activity. Conditions were on balance also positive in the construction and real estate sector, and in the wholesale and retail trade sector. On the other hand, the manufacturing sector reported overall negative conditions as most participants described a very weak start to the year.

Looking ahead, companies in Malta were more optimistic about future business activity than they were about recent performance, as a net 35% of firms expected an improvement in short-term business activity. This compares with 20% reported in the preceding quarter. Construction and real estate firms exhibit the most favourable outlook followed by the manufacturing sector. Business expectations are also positive on balance in the services sector, where firms foresee seasonal demand increases, and among retailers. However, in several segments, optimism is tempered by external risks such as tariffs, external competitiveness, competition on domestic markets and consumers' increased price sensitivity.

The net share of companies reporting higher input costs increased. Indeed, a net 81% of contacts reported that input prices have increased in recent months, up from 69% in the previous period. The net share of firms reporting higher selling prices also rose, reaching 48% in the first quarter of 2025, from 29% in the preceding quarter.

The net share of firms planning to invest more fell slightly to 24%, from 27% in the previous quarter, driven by a focus on modernisation, expansion, and efficiency improvements. Replies about employment plans point to an increased pace of job creation, with a net balance of 46% compared to 24% previously. Nonetheless, labour shortages persist.

This publication also incorporates a box providing insights into a sector specific analysis on retail trade.

The full publication is available here. The Business Dialogue survey can also be accessed in an interactive way through its dedicated dashboard.

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¹ The views expressed are solely those of the companies interviewed and do not necessarily reflect the views of the Central Bank of Malta. 

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