Employee shortage remains most significant issue identified by SMEs, survey finds

The employee shortage remains the most significant issue for SMEs, the latest barometer published by the Malta Chamber of SMEs reveals.

The SME Barometer for the first quarter of 2026 provides an overview of the current business climate and the key challenges faced by SMEs in Malta.

The survey was conducted between 3rd April and 17th April 2026, and it gathered 382 responses from businesses operating across a wide range of sectors including retail, construction, tourism, professional services, and manufacturing.

Respondents represented a diverse mix of enterprises, with the majority employing between 1 and 49 employees.

Asked to identify the two most important issues their business faces today, ’employee shortage’ was by far the highest selected issue, with 41.8 per cent. The second highest was unfair competition, with 21.5 per cent selecting this. Traffic congestion and skills mismatch were the issues selected by the next highest number of respondents, both selected by 15.7 per cent.

While the two highest selected responses were the same as Q4 2025, The third highest answer changed. In Q4 2025, Excessive competition had been seen the third most responses, while in this quarter it dropped to sixth.

When asked about national priorities, respondents identified a range of structural and governance-related issues that they believe require attention.

Overpopulation was the highest point selected (38 per cent). This was followed by lack of good governance (32 per cent) and level of corruption (25 per cent).

The number of respondents saying that they believe Malta is moving in the right direction continues on an upward trajectory. In Q2 2025, 30 per cent said it was. This percentage increased each quarter since then and in the latest barometer stands at 41 per cent.

Of the 59 per cent who said they feel Malta is moving in the wrong direction, 22 per cent cited political leadership and direction as the reason, followed by 18 per cent citing the cost of living, and 17 per cent citing quality of life and wellbeing concerns.

The majority of businesses (49 per cent) remain unsure as to whether the next 12 months will be a good time to invest. This is a lower percentage than the previous quarter, as the percentage of those who believe it will not be a good time to invest rose from 24 per cent in Q4 2025, to 32 % in Q1 2026. The percentage of those who believe it will be a good time is 19 per cent.

Respondents were asked whether the ongoing conflict in the Middle East affected their business operations. 13 per cent said it was having a significantly negative impact, while 32 per cent said it is having a manageable negative impact. 11 said it is having a mixed impact and 1 per cent said it is having a positive impact on their business operations. The rest said there is no noticeable impact or are unsure of the impact.

In terms of the type of government support that would be most effective for their business, the top three responses were regulatory flexibility/reduced administrative burden (29 per cent), financial assistance (22 per cent), and supply chain and logistics facilitation (17 per cent).