Only 30% of SMEs expect to remain in operation for more than a year if the current economic situation – brought about largely as a result of the Covid-19 pandemic – persists, according to a survey carried out by the Chamber of SMEs.
The survey, conducted among Maltese businesses between 29 June and 4 July, suggests that these grim prospects follow a notable drop in business.
An overwhelming majority – 90% – saw their sales drop by at least a quarter when compared to the same period in 2019. Though businesses deemed essential during the pandemic fared better, as one might expect, 82% still saw sales fall by at least a quarter, compared to 95% of non-essential businesses.
Nearly a third of businesses (31%) reported that sales fell by a staggering 90% when compared to 2019, though in this case, the difference between essential (17%) and non-essential (42%) businesses was stark.
Ultimately, 22% of those surveyed predicted that they would not be able to survive for more than three months in the current situation, while a further 33% feared their time would run out in 6 months. Another 15% believed that they could keep things going for a year, but not any longer.
Businesses’ main concerns were sales levels (79%), followed by uncertainty (69%) and employee wages (57%). 45% expressed concern about collecting payments, 33% about paying utilities and a further 31% about paying rents.
13% made redundancies, 14% plan to start them
According to the survey, 13% made employees redundant as a result of Covid-19, with most laying off less than a tenth of their workforce.
But when asked what business decisions they expect to implement by the end of the year, 14% of respondents said that they would be starting redundancies.
Almost half (48%) did not expect to implement significant changes, while 16% felt they may open up new opportunities by investing in eCommerce and online marketing. 9% planned to change the services or products they offered, while 6% planned to invest in new businesses.
However, 6% foresaw that they would be closing outlets, while a further 1% felt that a declaration of bankruptcy was imminent.
Assistance received largely deemed unimpressive
Respondents were also asked to rate the assistance they received during the pandemic, and in general, the scores they gave were not particularly high.
72% of respondents declared that they were eligible for the government’s Covid-19 support measures, but when asked how much this assistance helped them, these measures barely made the grade: the ratings translated to an average score of 54.5%
The support provided by banks during the pandemic was judged more harshly, failing to make the grade with an average score of 39.3%.
SMEs which relied on the use of rented property – 56% of respondents did, at least in part – were also asked to rate the government’s rent-related assistance, through which they were eligible for a grant of up to €2,500. The chamber had itself called for rental aid to be improved.
But the survey showed that respondents did not think highly of this measure; their ratings translate to a score of 31.8%.
Most SMEs rented property from private landlords, and 46% of these said that they received no assistance from their landlord during the pandemic. However, 18% postponed rent, 20% reduced it, 6% went as far as waiving rent, while 10% provided some other form of assistance.
Mixed feelings about teleworking
The pandemic has led to an increase in the use of teleworking, but 57% of SMEs surveyed either did not or could not implement telework.
Among the rest, 17% rated teleworking positively, 5% rated it negatively, and 21% expressed mixed feelings.
Nevertheless, the vast majority (73%) expected to keep some form of teleworking arrangement going, with 21% replying affirmatively in the negative.