Businesses report slower improvement in operating conditions

Malta businesses reported a slower improvement in operating conditions and a decline in investment intentions during the third quarter of 2026, according to the latest Business Dialogue publication by the Central Bank of Malta.

The fourth edition of the Bank’s Business Dialogue for 2026 found that many of the non-financial corporations surveyed continued to report stable or improving conditions. However, the net balance of firms reporting an improvement in current conditions fell to 37 per cent, from 41 per cent in the previous quarter.

Among the sectors surveyed, manufacturing recorded the highest share of firms reporting an expansion in activity.

Business expectations for the near term also weakened slightly. The net balance of firms anticipating higher activity stood at 41 per cent, down from 49 per cent in the previous survey round.

The construction and real estate sector reported the most favourable outlook, followed by services. Expectations among manufacturers, wholesalers and retailers were more cautious.

Cost pressures and selling prices

The share of firms reporting higher cost pressures decreased slightly to 81 per cent during the quarter under review.

Meanwhile, the net balance of firms raising their selling prices increased only marginally, standing at 42 per cent. The Central Bank noted that this suggests several firms are absorbing cost increases rather than passing them on to consumer prices.

Investment and employment

The net share of firms intending to increase investment declined to 15 per cent from 27 per cent in the previous quarter.

Investment was driven mainly by diversification efforts and efficiency gains, according to responses gathered during the latest round of business contacts.

The survey also indicated that job creation continued at a positive pace, although it was slightly slower than in the previous quarter.

The publication includes an analysis of firms’ expectations for unit costs over the past few years.

The Central Bank of Malta said the views expressed in the Business Dialogue are solely those of the companies interviewed and do not necessarily reflect the Bank’s views.