Economic recovery from COVID-19 'slower than anticipated', business survey shows

A survey by the Malta Employers’ Association finds that job retention remains strong but economic recovery will be 'slower than anticipated'

Recovery from the economic effects of the COVID-19 pandemic will be "slower than anticipated", a business survey released today shows.

The survey commissioned by the Malta Employers' Association covered more than 200 companies and found that the pandemic hit some sectors more severely than others.

“Many operators in the tourism industry may not survive another dry season unless they are kept on life support by fiscal incentives,” the association said.

The MEA said job retention remained strong with 79% of companies plan to keep their labour force stable in the coming three months, while 10% said they planned to reduce their workforce and 14% said they might increase employment but not necessarily to pre-COVID levels.

“However, government fiscal package will likely have to be extended throughout 2021, creating a strain on public finances, as, besides the enhanced expenditure, it is likely that government revenues will fall short of what was projected for 2021,” the association said.

The MEA said that 15% of companies reported activity similar to pre-COVID levels, and a further 16% said they were expecting a recovery within eight months. 24% of respondents said that it would take up to a year to recover, and a further 45% said that recovery would take more than one year.

32% of companies also told the association that investment projects had been postponed. The remaining 925 said that they do not foresee a reactivation of such projections in the coming six months.

Recommendations from the MEA

  • Strict enforcement of measures to reduce the spread of Covid – the current laissez-faire attitude is endangering jobs and lives.
  • Faster roll-out of the vaccine.
  • Persons who, without a valid reason, refuse to take the vaccine should not be entitled to quarantine leave.
  • Introduce a ‘green passport’. Employers should know who has been vaccinated or not in the interest of the welfare of all employees.
  • MEA supports measures for remote working where possible to reduce physical contact between persons at work. Work flexibility measures should be left up to open discussion between employers, individual employees and employee representatives and not legislated.
  • There should be no measures that create additional burdens to employers in such sensitive times. The public holiday measure is ill-timed and populist.
  • Despite the crisis, companies are still experiencing a shortage of labour in many areas. Identity Malta needs to expedite TCN applications. The government should address the drain of nurses in times when they are most needed.
  • Together with social partners and other stakeholders, the government needs to stimulate a constructive discussion about economic restructuring in the coming years.
  • There should be tax reliefs to reduce transportation costs and ease, introducing new barriers to trade due to BREXIT and COVID-19.
  • A less restrictive approach from banks towards provisions of loans, a deluge of controls and paperwork