Staff redundancies have jumped since April, most businesses have halted their investment projects and just half believe the economy will get back to pre-pandemic levels.

This was found in a business survey by the Malta Employer Association conducted in the last week of May, with 253 respondents covering around 300 companies and some 30,000 employees.

Increased redundancies

When asked about redundancies made since the last survey in April, 17%, which is around 43 companies, said they have had to cut staff, whilst 88% cut up to a quarter; 9% up to half and just 2% reported letting go of three-quarters of their employees.

This means redundancies have increased by 8% since April. 

However, more than three-quarters of respondents (83%) said they have not made any redundancies in the company.

When asked if companies will expect an increase in redundancies in the next three months (June- August 2020), 34% of respondents said they don’t expect to; 20% of respondents said yes whilst nearly half (46%) are still undecided.

Dry Investments

The majority of businesses said they postponed upcoming investment projects (74%) whilst 32% of those that delayed said they will definitely not be reactivating their project within the year.

Malta-based companies that continued their investment projects were mostly from the manufacturing industry (27%); professional services (22%) and wholesale and retail business (18%).

Businesses were unconfident with government schemes

At the time of the survey, businesses were not confident about government schemes to avoid redundancies with 27% saying they were not satisfied at all.

Respondents recommended initiatives like an extension of existing schemes like the COVID-19 wage supplement; increased financial assistance and subsidies for rent.

A new economic stimulus package has since been announced.

Post-pandemic recovery for business is uncertain

More than half (54%) businesses said they expect an eventual recovery of economic activity to pre-crisis levels. However, more than a quarter (34%) disagreed while the remaining 32% said they are uncertain.

Those in the hospitality and tourism sectors, which were hit hard by the COVID-19 restrictions, said they will need more than a year to fully recover.

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