Only 30% of businesses can survive the current situation for more than a year – Chamber of SMEs

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A survey conducted by the Chamber of SMEs has found that only 30% of business respondents think that their business can survive in the current situation due to the Coronavirus for more than a year.

Malta Chamber of SMEs announced the survey on the continued effects of the COVID-19 Pandemic on business in Malta, during a press conference yesterday.

362 SME respondents participated in the survey. Vice President of the Malta Chamber of SMEs Marcel Mizzi said that “the survey was carried out as an online survey with the use of tokens; therefore no one had the possibility of doing the survey more than once, and there wasn’t the possibility of someone taking part without the tokens.” 

The Chamber of SMEs conducted three surveys in total related to the impact of Coronavirus on business in Malta. The first survey was carried out at the beginning of March, the second survey was conducted in April. “The survey discussed today was carried out between 29th June and 4th July.”

Mizzi remarked that the survey included a number of generic questions such as which business sector they came from, the number of employees within the business, the way business operates – 41% business to consumer, 20% business to business, and 39% claimed that they do both.

Mizzi highlighted that in the current situation “22% of business respondents think that their business can last up to three months, 33% up to six months and 15% up to 12 months.”

The businesses were also asked whether they had to close at some point in time during the last months because of COVID-19. Mizzi highlighted that “more than half of them where closed – 55% decided to close their business, whilst 45% remained open.”

Mizzi added that the survey asked businesses to rate their amount of sales compared to the same period last year. Results showed that “6% remained the same as last year, 32% rated the amount of sales up to 50% of total sales, 14% rated up to 75% of total sales, and 4% in total had an increase in the amount of sales. The latter include businesses such as pharmacies which in recent months had an increase in demand.”

Businesses were also asked to highlight their biggest concerns with regards to the financial sector. The survey showed that 79% of business respondents highlighted that they are concerned with sales levels and 69% are concerned with the uncertainty of their business. Other concerns include employee wages – 57%, collecting payments – 45%, paying rent – 31%, paying utilities – 33% and Covid restriction costs – 18%.

In addition, Mizzi highlighted that businesses were asked what business decisions are going to be implemented until the end of the year. The survey shows that “48% will continue as is, 16% will invest in eCommerce and Online Marketing, 14% will start to effect redundancies, 6% will invest in new business and another 6% will close down.”

Further questions were asked regarding employment. Mizzi highlighted that “66% of businesses did not let go any of their employees, whilst 13% said they did.”

Mizzi remarked that “72% are eligible for any COVID-19 support measures, 16% weren’t, whilst 12% were unsure which the latter was very surprising.” He added that “15% felt that the government aid was very helpful, however 11% felt that it was of no help.”

With regards to teleworking during the COVID-19 months Mizzi remarked that “17% felt positive about it, 5% were not keen on teleworking whilst 21% have mixed feelings. This resulted that 73% of businesses will keep some form of teleworking arraignment.”

With regards to the issue of rent, the president of Malta Chamber of SMEs, Paul Abela said “that is issue is very complex and more work needs to be done.” Asked on how much rent is normally paid on a monthly basis by business owners, 32% said that they pay more than €2,000, 30% more than €5,000, 12% more than €10,000, 14% more than €500 and 9% more than €20,000.”

Mizzi also highlighted the issue regarding the level of support coming from banks during the current time. He said that “there was an improvement from previous surveys but there is still the issue that banks do not totally understand the situation of businesses.”

The survey showed that 46% said that the landlord did not help in any way with rent, 18% postponed the rent and 20% reduced the rent. However, Abigail Mamo, CEO at Malta Chamber of SMEs said “that we cannot expect that landlords to carry all the weight in such a situation. Therefore, we expect that this is divided between the government, the business owner and the landlord.”