Malta’s business investment intentions declined in the third quarter of 2026, while firms reported a slower improvement in operating conditions and slightly weaker expectations for near-term activity, according to the Central Bank of Malta.

In its latest Business Dialogue publication, the Central Bank reported that the net balance of firms recording an improvement in current conditions fell to 37 per cent, down from 41 per cent in the previous quarter.

Despite the decline, many of the non-financial corporations surveyed continued to report stable or improving conditions. Manufacturing recorded the highest share of firms reporting an expansion in activity.

Business expectations ease

Expectations for business activity over the near term also weakened, with the net balance of firms anticipating higher activity falling to 41 per cent, from 49 per cent in the previous survey round.

The construction and real estate sector reported the most favourable outlook, followed by services. Manufacturers, wholesalers and retailers expressed more cautious expectations.

Cost pressures remain widespread

The share of firms reporting higher cost pressures edged down to 81 per cent during the quarter.

Meanwhile, the net balance of firms increasing their selling prices rose only marginally to 42 per cent. According to the Central Bank, this suggests that several firms are absorbing cost increases rather than passing them on to consumer prices.

Investment intentions decline

The net share of firms intending to increase investment fell to 15 per cent in the third quarter, compared with 27 per cent in the previous quarter.

Firms cited diversification efforts and efficiency gains as the main drivers of investment.

Employment continued to grow at a positive pace, although job creation was slightly slower than in the previous quarter.

The latest publication also includes an analysis of firms’ expectations for unit costs over the past few years.

The Central Bank noted that the views expressed in the Business Dialogue reflect those of the companies interviewed and do not necessarily represent the Bank’s own views.