Chamber: 2012 business climate to be characterised by ‘prudence and uncertainty’

For the twelfth consecutive year, the Malta Chamber of Commerce, Enterprise and Industry participated in the annual pan-European benchmarking exercise organised by Eurochambres, a perception survey carried out across 25 European countries.

This year's report highlights export markets as the main source of optimism for 2012. Otherwise the perception for 2012 are characterised by restricted investment, stable employment and constrained domestic sales.

The Eurochambres Economic Survey (EES) indicates that the ongoing effects of the economic downturn and the eurozone debt crisis have undermined business confidence and prospects across and far beyond the single currency area. Indeed, the survey-wide average for the business confidence indicator is negative for only the second time in the EES' 19-year history.

Within the local context the situation differs between the services and manufacturing sectors. The local report shows that the Maltese economy has so far held its ground in the face of the international financial and trade upheavals it has had to face.

But every economic sector is responding to its particular trade environment with different degrees of success.

Overall, the services sectors appear buoyant in their performance and expectations - although they may be focusing more on consolidating their shares in the respective markets in which they operate. On the other hand, manufacturing sectors are finding it somewhat harder to cope and they are the areas that continue to require support.

The number of firms responding to the survey projecting new investment and employment are slowing down in 2012. This is especially true for manufacturing respondents.

"It is important to gauge our perceptions with the European benchmarks provided by the Eurochambres initiative. The perceptions captured often materialise and we call on our stakeholders to take heed of these signals," Chamber president Tancred Tabone said.

The results of the employment indicator suggest that while fewer new jobs will be created next year, most businesses are intent on maintaining current levels of staff. Domestic sales predictions are estimated to be lower for next year, most probably mirroring the careful spending approach of end consumers, whilst investment levels would also appear to be on the decrease for next year.

Export predictions for 2012 stand out from a scenario that is otherwise largely defined by prudence and uncertainty. Strikingly, this export optimism is to a large degree led by respondents from the manufacturing sector. This shows that the sector is still upbeat about entering new markets during the forthcoming year.