PwC Malta Middle Market Barometer€¦ · pharmaceutical and food & beverage industry with 71% of...

PwC Market Barometer 1

PwC Malta Middle MarketBarometer

www.pwc.com/mt

Manufacturing IndustryApril 2015


PwC market barometer reports on the local manufacturing industry

PwC Malta has recently announced the results of its local manufacturing market barometer in which over 270 local manufacturing entities participated. The barometer covers a wide cross section of industries operating in Malta, namely the textile, pharmaceutical, food & beverage, printing and other entities involved in the processing and manufacture of wood, metals, plastics and electronics. The results, which are being reported by both the respective industry and the employee count, have been gathered through telephone interviews, which were carried out during the second and third week of March 2015.

Local manufactures hold a guarded outlook for the future. The barometer results indicate that in aggregate, 27% have plans for capital investment in the next six months. 63% of those interviewed have no plans at all and 10% are unsure. Differences in this outlook, however, arise when analysing the results by employee count and industry. Companies employing over 50 people are more likely to invest. The pharmaceutical industry is the most upbeat, with 86% – which generally represent entities employing over 250 employees, indicating immediate investment plans. On the other hand, manufacturing concerns involved in wood products and aluminium (basic and fabricated materials), which are the smaller sized entities hold more conservative plans towards investment. The barometer also analyses the extent of investment for the entities reporting such plans. 32% of those participating in the survey, which represent the companies employing the larger number of employees, have investment plans which exceed the €250,000.

While employment prospects are more prevalent in the pharmaceutical and food & beverage industry with 71% of these industries reporting plans for employing more people in the next twelve months, in aggregate, the barometer

reports that only 27% of the local manufacturing industry is considering expanding its workforce during the forthcoming 12 months. The rest are either unsure (15%) or have no plans (58%).

The extent of exports as a factor of turnover also depicts the differing profile of the local manufacturing industry. Whilst in aggregate only 13% of the population interviewed have exports accounting for more than 30% of turnover, this percentage increases where companies, employ a larger number, and in the pharmaceutical industry and entities processing electrical and optical products.

In nearly all industries participating in the barometer, competition tops the concern being faced - with 26% of respondents considering competition as the biggest threat to their business. Debtors and cash flow problems, at 19%, ranks as the second most common threat. Other concerns emerge as being the price of raw materials and the limitations in the supply of labour. The results analysed by industry and employee count yield further interesting insights. Debtor management is more acute in the printing industry and within entities producing machinery equipment and fabricated metals. The barometer also points towards the difficulty that companies employing over 50 employees face in recruiting more employees.

The industry holds mixed feelings on the incidence of the bureaucracy in Malta. 22% of those interviewed consider that bureaucracy has increased. Another 22% reported a decreasing trend, with the remaining indicating the same level or are unsure.

The results, which represent a population sourced from a public business directory, are reported in full.


Plans for capital investment in the next 6 months

Yes No Not sureCompanies employing less than 10 people 17% 72% 11%

Companies employing between 11 and 50 people 40% 51% 9%


Companies employing over 250 people 89% 11% -

Total 27% 63% 10%Ana

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Yes No Not sureWood & Wood Products 19% 70% 11%

Textile & Textile Products 43% 57% -

Rubber & Plastics 67% 33% -

Pulp, Paper, Products, Publishing & Printing 39% 50% 11%

Pharmaceutical & Medical 86% 14% -

Non-Metallic Products 20% 67% 13%

Machinery & Equipment n.e.c. 23% 70% 7%

Food & Beverage 71% 29% -

Electrical & Optical products 83% 17% -

Chemical & Chemical products 33% 67% -

Basic & Fabricated Metals 14% 72% 14%


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less than €50,000 Over €50,000 but less than €200,000 Over €200,000

Companies employing less than 10 people 74% 15% 11%



Companies employing over 250 people - - 100%


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less than €50,000 Over €50,000 but less than €200,000 Over €200,000

Wood & Wood Products 86% 7% 7%

Textile & Textile Products - 67% 33%

Rubber & Plastics 34% 33% 33%


Pharmaceutical & Medical - 50% 50%

Non-Metallic Products 33% 67% -


Food & Beverage - 80% 20%


Chemical & Chemical products - 100% -



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Extent of capital investment







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Textile & Textile Products 29% 71% -

Rubber & Plastics 56% 22% 22%



Non-Metallic Products 33% 60% 7%




Chemical & Chemical products 33% 67% -



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Plans for recruitment in the next 12 months



Companies employing between 11 and 50 people 21% 79% -

Companies employing between 51 and 250 people 52% 48% -


Total 13% 86% 1%Ana

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Textile & Textile Products - 71% 29%

Rubber & Plastics 44% 56% -

Pulp, Paper, Products, Publishing & Printing 4% 96% -


Non-Metallic Products 7% 93% -

Machinery & Equipment n.e.c. 20% 80% -


Electrical & Optical products 100% - -

Chemical & Chemical products - 100% -

Basic & Fabricated Metals 5% 95% -

Total 13% 86% 1%Ana

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Exports accounting for more than 30% of turnover


Biggest concern / threat affecting business

CompetitionDebtors

and cash flow

Prices of raw

materials

Labourforce

Fall in demand

Emergingeconomies Bureaucracy Transport

costCrisis in

LibyaNot

Sure Other

Companies employing less than 10 people 25% 22% 9% 6% 6% - 2% 2% - 20% 8%

Companies employing between 11 and 50 people

26% 12% 12% 9% - 5% 2% - 5% 7% 22%

Companies employing between 51 and 250 people

43% 5% 5% 19% - - - - - 5% 23%

Companies employing over 250 people 33% - - 33% - 22% - - - - 12%

Total 26% 19% 10% 8% 5% 3% 1% 1% 1% 16% 10%

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Biggest concern / threat affecting business

CompetitionDebtors

and cash flow

Prices of raw

materials

Labourforce

Fall in demand

Emergingeconomies Bureaucracy Transport

costCrisis in

LibyaNot

Sure Other

Wood & Wood Products 35% 16% 12% 14% 1% 3% 1% - - 8% 10%

Textile & Textile Products 43% - - 14% - - - - - - 43%

Rubber & Plastics 44% 11% - - - - - 22% - - 23%

Pulp, Paper, Products, Publishing & Printing 21% 25% 7% 11% 7% - 4% - - - 25%

Pharmaceutical & Medical 71% - - - - 14% - 14% - - 1%

Non-Metallic Products 40% - 20% 7% - 7% - 7% - 7% 12%

Machinery & Equipment n.e.c. 13% 27% 3% 10% 7% 3% - - 3% 23% 11%

Food & Beverage 43% - 14% 14% - - - - - - 29%

Electrical & Optical products 67% - - 17% - - - - - - 16%

Chemical & Chemical products 33% - 33% - 33% - - - - - 1%

Basic & Fabricated Metals 15% 26% 8% 3% 6% 1% 2% - 1% 32% 6%

Total 26% 19% 10% 8% 5% 3% 1% 1% 1% 16% 10%Ana

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Concerns affecting business


Increased Decreased The same Not sureCompanies employing less than 10 people 20% 25% 35% 20%

Companies employing between 11 and 50 people 31% 9% 51% 9%

Companies employing between 51 and 250 people 29% 18% 48% 5%

Companies employing over 250 people - 22% 78% -

Total 22% 22% 39% 17%Ana

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Increased Decreased The same Not sureWood & Wood Products 23% 34% 25% 18%

Textile & Textile Products - 14% 43% 43%

Rubber & Plastics 45% 11% 44% -

Pulp, Paper, Products, Publishing & Printing 22% 21% 43% 14%

Pharmaceutical & Medical 29% 28% 29% 14%

Non-Metallic Products 33% 27% 20% 20%

Machinery & Equipment n.e.c. 21% 3% 53% 23%

Food & Beverage - 14% 86% -

Electrical & Optical products - - 83% 17%

Chemical & Chemical products 33% - 67% -

Basic & Fabricated Metals 20% 22% 42% 16%

Total 22% 22% 39% 17%Ana

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Bureaucracy


David ValenziaPartner+356 21 2564 [email protected]

Michael Formosa+356 2564 [email protected]

Contacts

www.pwc.com/mt/barometer

Copyright © 2015 PricewaterhouseCoopers. All rights reserved. PwC refers to the Malta member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

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