Manufacturing now second most important employer in Malta

The manufacturing industry now contributes to 11% of total full time employment, making it the second most important employer in Malta, Malta Enterprise head of research Brian Camilleri said today

Speaking at a seminar on foreign direct investment in Malta and the findings of Malta Enterprises’s 2013-2016 annual report, Camilleri explained that 12% of those working in the manufacturing sector were expats, and the sector offered an important employment avenue for those less academically inclined.

Manufacturing now makes up 11% of employment in Malta

Regarding foreign direct investment, Malta Enterprise chairperson William Wait said in a video message that it was essential that Malta kept its current FDI, and worked towards attracting more.

Echoing this opinion, Malta Enterprise CEO Mario Galea said that Malta had no option but to keep up its efforts to get more FDI to the island.

“We have a good number of established industries which are expanding, but technology is always changing so we need to continue to attract what is successful now, and think of what will be successful in the future,” he maintained.

Malta had to look for new areas which could add value to Malta, and this had to be supported by the country’s educational plan and the way it looked at business, he said, as he also emphasised that investment in local industry, including the manufacturing industry - the least volatile sector of the economy - was also very important.

Addressing the conference, economy minister Chris Cardona said that the findings reflected the state of the economy, which was growing and the forcecast for which indicates that growth will continue.

Regarding foreign direct investment, Cardona said that Malta was offering various incentives to attract this, including the microinvest scheme. However, Malta was also taking stock of its current incentives, and looking at the incentive models of other jurisdictions, and examining whether some of these can be tailored to the island’s needs.

Turning to Prime Minister Joseph Muscat's previous announcement that Malta should become a trailblazer in disruptive technology, such as blockchain and Bitcoin, Cardona said that Malta had the advantage of having a nimble legislative process which allowed it to draft legislation quickly. This gave us an advantage in tapping into new markets, and can be applied to the disruptive technology industry.

“We already did this with the maritime sector in the past, and more recently with financial services and igaming. We can now do this with disruptive technology too. No operator will seek a jurisdiction which doesn’t have the appropriate legal framework in place, so through putting laws through rapidly, we can give these economic operators a playground to set up their business in Malta,” he asserted.

“We also codified all intellectual property legislation, and now want to be one of the few countries in Europe which has a legal act through which all IP is regulated.”

Cardona explained that Malta reacted according to supply and demand when it came to manufacturing, adding that this was a sector which was much less volatile than, for instance, the gaming industry.

“When it comes to gaming, European Union legislation can quickly change, and this could shift the gaming focus to other countries, even those outside the EU, such as Serbia. Manufacturing is much less prone to change.”

Turning to Brexit, he said that while this was a challenge for our country, it could also lead to benefits.

“The taskforce led by Joe Zammit Tabone is working well and has identified a number of co-location investment opportunities with the UK. We took Brexit very serious - even from before their referendum - and now have numerous co-location, industry and trade balance plans in place,” he said, maintaining that the only ‘nebulous issue’ now was that of the social rights of Maltese citizens in the UK and British citizens in Malta.

Amongst the other points which emerged from the seminar’s discussion, Malta’s high energy costs, its peripheral location, the rising cost of labour and the rent rates, were identified as challenges towards bringing more FDI to Malta. However, Cardona said that offering more incentives could be a means of addressing these issues and make-up for Malta’s potential disadvantages.