First look at EY’s Malta Attractiveness Survey shows how investors have been reacting to COVID-19

Every October, EY Malta presents the results of the annual Malta Attractiveness Survey during an event that is known for hosting more than 1,000 of Malta’s top CEOs, entrepreneurs, investors, advisors, business and government leaders to discuss all matters related to foreign investment, business and technology.

The 2020 event has been transformed into a virtual experience, now called Future Realised, and the survey has been updated to focus on the challenges being faced by companies as a result of the COVID-19 pandemic.

Ronald Attard, EY Malta’s Country Managing Partner, said: “Given the everchanging nature of the pandemic, ongoing global economic crisis and uncertainty in the market, we want to present a few survey results, which over the last few years has proven to be a really important indicator on what the country is doing well and where we need to do better. This year’s focus will place extra emphasis on exploring the possibilities for Malta to thrive despite its inherent insularity in a world which is more connected remotely. We also want to take the opportunity to explore the benefits of pursuing sustainable and longer-term value goals – this is the moment to reset the Island’s ambitions.”

EY’s Attractiveness Surveys are widely recognized as a key source of insight into foreign direct investment (FDI). By examining the attractiveness of a country as an investment destination, the EY surveys are designed to help businesses make investment decisions and governments remove barriers to growth. The exercise is carried out in several countries across the world and a report for all Europe was released last May. The Malta Attractiveness Survey data was gathered throughout June 2020, during one-to-one interviews with top FDI decision-makers here in Malta.

A total of 57% of FDI companies have stated that the financial impact of COVID19 has been negative so far, while 21% stated it was positive and another 22% saw no change. The sectors worst hit include hospitality (100%) and manufacturing (79%). Insurance (57%) and other financial services (33%) are the sectors which provided the highest amount of positive replies.

Fifty-six percent of companies estimate they will make a full recovery to 2019 levels in one year or under. A total of 40% believe the recovery process will take more than 1 - 3 years.

Around half of investors have not changed their 2020 investment plans as a result of COVID-19. Seventeen percent have delayed their plans until 2021, 12% have decreased their plans slightly, and 10% have substantially decreased their plans. A total of 7% have completely cut back on their 2020 investment plans.

Remote working arrangements have dominated the last few months, with 77% of respondents indicating that they have implemented some form of remote work in their business. Positively 99% of these companies said that they adapted quickly but a majority (53%) have not seen an increase in productivity. Still, 68% will adopt remote working for the long-term and 18% will reduce office space as a result of this new way of working.

The top three trends that companies believe will accelerate over the next three years as a result of COVID-19 are digital customer access to services (78%), adoption of technology that automates manual human processes (61%), and a focus on sustainability and climate (57%). Comparing the Malta and Europe Attractiveness Surveys, the top three trends proved to be similar but differences can be seen with Maltese investors placing greater emphasis on geopolitical tensions (28%) while European investors expect the reversal of globalization to play a bigger role (56%).

Apart from COVID-19, this year’s survey asked what are the main societal issues being tackled at company level. Respondents indicated education, skills and training (74%) diversity and inclusiveness (60%) and environmental sustainability (51%).

The full report and results, including the overall attractiveness index and the scoreboard on various criteria, will be released next October during the highly anticipated Future Realised Week taking place between October 20 – 23. For more information and to register check out www.ey.com/en_mt/events/future-realised-malta-2020and for any queries contact events@mt.ey.com.