News - News Releases 2025
24/07/2025 10:19:00
Central Bank of Malta Business Dialogue Publication – Third edition of 2025
The latest business dialogue held between the Central Bank of Malta and non-financial corporations shows that in the second quarter of 2025, overall business conditions remained positive but with a mixed performance across sectors.1 At 22%, the economy-wide net share of respondents reporting an expansion stood below that in the last three years but improved modestly compared to the previous survey round. Among all sectors, service-oriented firms recorded the highest net share of companies experiencing expansion in activity. On balance, conditions were also positive in the manufacturing sector, and in the construction and real estate sector. On the other hand, the wholesale and retail sector reported overall negative conditions.
Looking ahead, companies in Malta expressed greater optimism regarding future business activity compared to their assessment of recent performance, as a net 33% of firms anticipated an improvement in short-term business activity. This represents a slight decrease compared to the 35% reported in the previous quarter. Service providers report the most favourable outlook, followed by the manufacturing sector. Businesses in the construction and real estate sector maintains a cautiously optimistic outlook, while for the wholesale and retail sector expectations are negative on balance, amid heightened competition, price sensitivity, and economic uncertainty.
Cost pressures have remained high but have moderated, as the net share of companies reporting higher input costs has decreased from 81% in the previous quarter to 63% in the second quarter. The balance of firms reporting higher selling prices edged down to 42% down from 48% previously.
The net share of firms intending to increase investment declined to 13%, from 24% in the first quarter. Investment continued to be driven by requirements such as CAPEX, expansions, efficiency improvements, and diversification efforts.
Firms' employment plans are broadly consistent with those of the first quarter, with a net 45% expecting to recruit, compared to 46% in the preceding quarter. Nonetheless, attracting and retaining skilled workers remains a pressing issue.
This publication also incorporates a box focusing on company replies on the potential impact of tariffs, noting the uncertainty that surrounds them is making many firms adopt a "wait and see" approach for now.
The full publication is available here. The Business Dialogue survey can also be accessed in an 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.
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