When an industry hits certain profitable highs, it would be expected that some declines would follow. Recent statistics published by the National Statistics Office show that turnover in the real estate industry has decreased by 31.7% when compared to the same quarter of 2018.
In addition to the dip in the property sector, figures have also decreased in the administrative and support services by around fifteen percent. Other industries such as the professional, scientific, technical, accommodation and food dipped as well.
There have been several rumours about a possible downturn across various industries including gaming which has been impacted following more stringent regulations in Sweden.
Across the whole country, turnover has decreased by 2.1%. When we speak about turnover, we mean the combination of total sales and other income.
What does this mean for the Maltese economy? Is it simply a strong performance following an exceptional year which is hard to match? Or could it be something else which is worse? A downturn in the fortunes of a country which has been performing exceptionally well?
Under the lens are the prices of property for both acquisition and rent. Prices seem to be fluctuating which may indicate incoming instability. With that said, some experts suggest that this is simply a necessary market correction.
This news is also combined with the fact that recently Malta has been under the spotlight for situations of non-compliance in its financial services sphere. Malta has had situations where banks had to close shop due to suspicious transactions, impacting the reputation of the jurisdiction and its financial services hub. This has placed Malta in a position of scrutiny by the European Union which is piling the pressure for the country to adopt more stringent anti-money laundering checks and processes. Could this be impacting our turnover?
A significant dip in one of the main industries in Malta which include gaming, financial services, property or tourism is likely to create a ripple effect which will impact the entire economy. This may put several people in tough spots, especially those who may be employed with a company operating in one of these industries. Others who may be impacted include those who depend on the rental income they generate from a property they bought as an investment. Let us hope that it does not come to this.
What is your view on these recent dips in economic performance? Are these normal ups and downs? Let us know in the comments section.