More than half of businesses negatively impacted by inflation – MEA survey

More than half of local businesses are concerned about the expected Cost of Living Adjustment (COLA), according to a survey conducted by the Malta Employers Association.

The MEA presented their survey results during a press conference on Tuesday to address the impact of inflation on local businesses.

The survey was conducted among approximately 400 businesses and representatives of the local economy and found that 55% of these businesses will be negatively impacted by the COLA increase forecast for next year.

Of those companies surveyed, only 28% will absorb costs themselves, while 22% will pass the full cost to clients, and 50% will partially increase prices to cover increased costs.

How companies plan to handle the increase in operating costs. Source: Malta Employers Association

Those companies that are geared toward the domestic market are more likely to pass on the full cost to the consumer

So far, 55% of the respondents have absorbed the price increases themselves, while 64% are anticipating a decrease in demand for their products/services, especially in the areas of wholesale and retail and less in professional services

The survey also found that 72% of respondents are expecting reduced profitability in the coming 12 months, however, the rate of employment will remain stable and staff shortages will persist.

Projected outlook by different business sectors. Source: Malta Employers Association

The survey respondents’ overall outlook for the coming months is negative to stable with manufacturing, with companies catering for the domestic market having a more negative outlook than those in the hospitality and tourism or professional services sectors.

According to the latest media reports, the cost-of-living adjustment is likely to approach €10 per week by the post-summer budget.


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