The latest business dialogue held between the Central Bank of Malta and non-financial corporations shows that in the first quarter of 2026, many of the firms contacted noted stable or improving conditions, though the net balance reporting an amelioration declined from 52% in the previous quarter, to 33%.
Among the main sectors surveyed, services firms were the most likely to report an expansion in activity although their assessment softened slightly when compared to the previous quarter.
On balance, conditions improved in the manufacturing sector.
On the other hand, in both the construction and real estate, and wholesale and retail sectors conditions shifted towards one of stabilisation from an expansion.
Despite the increase in global uncertainty, near-term expectations for business activity improved, with a net 42% of firms anticipating higher activity, up from 19% in the previous survey round.
This optimism is the strongest observed in almost two years.
The construction and real estate sector reported the most favourable outlook, followed closely by the services sector.
The trade sector remains optimistic on balance, but uncertainty is clouding the short-term outlook, while overall optimism among manufacturing companies was limited.
In the quarter under review, the share of firms reporting higher cost pressures increased marginally.
These cost pressures lied in the moderate to upper bracket. Similarly, the net balance of firms raising selling prices rose.
The net share of firms intending to increase investment rose slightly with investment driven mainly by capital expenditure and diversification efforts.
Responses collected in the latest round of contacts also suggests a positive pace of job creation, with improvements noted from the previous quarter.
This publication includes a box focusing on firms’ initial insights to the conflict in the Middle East.
These initial perspectives suggest that the conflict has so far had limited impact on firm operations, but respondents noted that a prolonged escalation could lead to shipment delays and stock shortages.
That said, in some sectors, like tourism, the conflict has resulted in higher activity while some respondents noted that Malta might have a chance to attract investment that would otherwise be directed to the Middle East.
