Issue link: https://maltatoday.uberflip.com/i/1280162
20.08.2020 7 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS CONTRIBUTING JOURNALIST: MASSIMO COSTA BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 T here has been much talk of the feeble drop in unemployment levels in the Maltese labour force, but this is not a true reflection of the im- pact experienced due to the COVID-19 pandemic. COVID-19 led to an exodus of foreign workers that were very probably representative of the work- ing segment that was not regularised or entirely on the books. e other segment refers to foreign workers on contract who could not continue in their local employment. Timely government intervention led to many jobs being saved. And the continued injection of direct aid to businesses and the service industry ensures, to some extent for now, that businesses do not flounder and jobs will be retained. ere are ominous signs on the horizon: in June retail trade declined by 8.4% from the previous year, following a fall of 12.2% in May. Confidence within the retail sector fell to a new historical low of -53.6, from -30.1 in the previous month. In June the num- ber of persons on the unemployment register stood at 4,270, down from 4,409 in May but still high- er than 1,616 registered a year earlier. e annual growth in the industrial production index, which measures economic activity in the quarrying, man- ufacturing and energy sectors remained negative for the third consecutive month. e index fell by 3.2% in annual terms, following a sharper contraction of 7.7% in May. Additionally, the turnover from selected servic- es activities decreased by a massive 27.1% over the same quarter in 2019, as a result of reducing con- sumption and working hours from the COVID-19 pandemic. at is data gleaned from 900 question- naires to businesses, requesting information on turnover, employment, wages and salaries, compar- ing these levels with previous years. e worst decreases in turnover were recorded in the accommodation and food service activities (87.1 per cent), administrative and support service activi- ties (49.3 per cent), transportation and storage (47.6 per cent), real estate activities (46.5 per cent), motor trade (37.3 per cent), wholesale trade (21.8 per cent), retail trade (13.5 per cent) and professional, scientif- ic and technical activities (8.5 per cent). It is clear that government has to continue sustain- ing its aid package to every sector. Without this, many local businesses will axe jobs and others will simply close down. Many small businesses are al- ready struggling as it is. Beyond saving businesses, there needs to be some forward-planning that will kickstart new initiatives and new ventures in the business world that will tap into new markets. Small businesses themselves re- quire an army of business consultants to help them cut costs and adapt to the new market realities of COVID-19. And we need strict law enforcement on pandemic restrictions so that the continued misbe- haviour of those who do not respect public health rules, does not lead to mass closures of businesses. is is necessary if we are to expect new economic drive in a world which is increasingly competitive, even in a depressed and moribund market. is pre- carious moment requires that solidarity is shown to- wards the private sector from a government which has a bloated employment complement. e public sector wage bill has remained un- touched, whilst the productivity of the private sec- tor has had to make do with reduced turnovers, re- duced wages, and reduced profits. Is this sustainable? e government has to look inward and ensure its own savings can be turned into a dynamic push for the private sector, if it is to safeguard an economy built on innovation and com- petition. Needed: a dynamic push for the private sector