44% of businesses believe government help will be needed in 2021 – MEA survey

MEA CEO Joseph Farrugia

Last Updated on Thursday, 10 September, 2020 at 9:18 am by Andre Camilleri

A survey conducted by the Malta Employers’ Association (MEA) shows that 44% of businesses in Malta think that they will require governmental help in 2021.

This is the third survey in the series of surveys that the MEA has been carrying out to assess the impact that COVID-19 and the measures implemented have had on businesses. The survey received 237 respondents who answered between the period starting from 27 August and 4 September.

Out of the respondents, 22% companies employ less than 10 employees, 39% between 10 and 49 employees, 29% employ 50-249 employees, 7% employ between 250-499 and 4% more that 500 employees.

Similar to previous surveys, most respondents come from the industries of wholesale and retail, hospitality, manufacturing, gaming and education. Another thing to note is that 54% of respondents are geared for the domestic economy whilst 18% are geared for export and 27% are geared for both.

Asked about the effects of COVID-19 on their business 81% said they experienced a loss, 16% had no effect and 3% claimed to have experienced an increase. Notably, there is a slight decrease in loss of business (-6%) and an increase in no effect (+6%) from the previous survey conducted in June 2020.

From the 81% that said they experienced a loss, most (27%) said that the severity was less than a 60% loss, followed by 23% who said the loss was less than 15-30%.

“As expected, the hospitality sector is the sector that was effected the most, with 12% of respondents claiming that they have experienced a loss of business by more than 60%,” MEA CEO Joseph Farrugia said.

Respondents were also asked to compare their current situation with the situation in March, April and May; 48% of respondents reported improvements in business performance, 36% stated that business remained the same and 16% noted that it got worse.

The survey also shows that 73% anticipated the second wave happening which started around July due to certain mass event mishaps and has been gradually consistent over the past couple of months.

When we asked if companies think that the spike could have been avoided, 37% said yes, 59% said ‘partially’ yes while only 4% said there was nothing could have been done.

The survey also asked whether companies experienced redundancies between June and August. 81% stated they had no redundancies in their company while the remaining 19% have had redundancies, at different percentages (85% by up to 25% of the workforce, 9% by up to 50%, 4% by up to 75%).

Asked if they are expecting redundancies in the coming three months (September, October and November), 19% answered yes for an increase, 38% said no while 43% are still undecided. Farrugia explained that those who are anticipating redundancies will not have a lot of redundancies, however, as most think they will only make 1-10% of their company redundant.

A notable result from this survey concerns the support the government gave businesses during COVID-19. Notably, the €100 vouchers were one of the lowest in effectivity (1%), but Farrugia said that this is natural since the sectors participating vary from just hospitality or retail ones. On the other hand, the wage supplement scheme was used by 62% of respondents. 

Asked if they envisage their businesses will depend on government support in 2021, 44% said yes, 16% said no, 22% do not know while 17% have not received any government support at all.

The reopening of schools was another topic mentioned in the survey as the MEA asked what sort of impact it will have on businesses. 78% said that they will be affected by it (38% strongly while 40% mildly). The rest believe that the impact will be negligible or inexistent;  Farrugia attributed this to companies that have foreign workers without a family in Malta or with workers over 50 who do not have kids at home anymore.

Other major employment concerns businesses have in relation to COVID-19 include; a sense of instability and uncertainty, demotivated employees, fear of returning to work, less cash in hand (struggling to pay salaries), lack of skilled staff (recruitment issues), permits of foreign nationals, increase in sick leave as well as quarantine leave.

Asked how long they think the recovery period will be for business activity to reach COVID-19 levels, the majority (35%) said 12 to 18 months followed by 22% saying more than 18 months. However, 13% said that they have already reached COVID-19 levels.

Telework arrangements

  • 65% of survey respondants have employees who are making use of telework
  • 60% of those who have teleworking as an option said that the system is equally productive, 33% said it is less productive while 7% said it is more productive.
  • Asked if they will keep teleworking arrangements after Covid, out of the 65% that answered yes previously, 42% deem to keep it the same and/or increase it. However, 33% said they will decrease the amount while 20% are still undecided.       

Postponement of Investment Projects

  • 60% said that have not initiated any investment projects that have been postponed due to COVID-19. Out o this 60%, 11% stated that they will definitely be reactivating their projects in the next …
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