8 July 2021 | 1100 hrs | 120/2021

Micro, small and medium enterprises (SMEs) accounted for 69.3% of the combined Personnel Costs and Gross Operating Surplus (GOS) generated by the non-financial business economy in 2019, compared to a share of 68.3% in 2018. Structural Business Statistics: 2019

Cut-off date: In 2019, the non-financial business economy in incorporating Industry, Construction, Wholesale and retail 30 June 2021 trade and Services activities generated €3,882.1 million in GOS (or profits) and paid out €3,328.1 million in Personnel costs to its employees. SMEs registered an increase in these two variables of 13.0 and 10.3 per cent respectively, when compared to 2018. Large enterprises earned €1,218.3 million in GOS and when compared to the other three size categories of SMEs independently, they contributed to the highest values of Turnover, Production and Personnel costs. The largest share (31.4 per cent) of Persons employed in Malta were employed with micro enterprises (Table 2).

Chart 1. Main variables by size classification: 2019

Number of units

Turnover

Production

Gross Operating Surplus

Personnel Costs main variables

Investment in tangible assets

Persons employed

0% 20% 40% 60% 80% 100% per cent Micro Small Medium Large

Performance of large enterprises

There were 8 new large enterprises in 2019 compared to 2018. For the same period, the large enterprises registered an increase in the number of Persons employed and Personnel costs of 4.4 per cent and 4.9 per cent respectively. Turnover and GOS generated by large enterprises increased by 7.7 per cent and 8.3 per cent respectively. Investment in tangible assets for the same category dropped by 27.8 per cent, to €286.8 million (Table 2).

The SME classification used in this news release is organised according to the staff headcount and the ‘Turnover’ financial ceilings recognised in annex article 2 of Commission Recommendation 2003/361/EC.

The Non-financial business economy referred to in this news release features industries covered in NACE Sections B to N (excluding NACE K and including NACE S95).

Compiled by: Structural Business Statistics Unit 1 ContactKindly us: indicate National source Statistics when quoting Office, from thisLascaris, release. VLT 2000 The advance T. +356 release 25997219, calendar E. may [email protected] be consulted at www.nso.gov.mt https://twitter.com/NSOMALTA/Issued by: Dissemination Unit, National https://www.facebook.com/nsomalta/ Statistics Office, Lascaris, Valletta VLT 2000, Malta. T. +356 2599 7219 F. +356 2599 7205 E. [email protected] Key indicators across activity domains

During 2019, the largest number of operating enterprises were micro enterprises in the Services (NACE Section H to N, excl. K and Division S95), Wholesale and retail trade (NACE Section G) and Construction (NACE Section F) domains respectively. Turnover was mostly invoiced by large enterprises in the Services domain, leading also to the largest amounts of Production and GOS generated in the economy. Small enterprises in the Services domain recorded the largest amount of Investment in tangible assets (€259.8 million). With 27,724 Persons employed, micro enterprises in the Services domain engaged the largest number of persons followed by the large and medium enterprises in the same domain at 27,624 and 22,108 persons respectively. Personnel costs paid by enterprises within the Services domain amounted to €1,966.3 million, or 59.1 per cent of the total (Table 3, Chart 1).

When excluding micro enterprises due to the element of mixed income, the share of GOS from the combined GOS and Personnel costs was higher for larger size classes across all domains. An exception to this observation was the Construction domain, which followed the opposite pattern (Chart 2).

The Services domain was dominant in all the main variables of the non-financial business economy. SMEs were responsible for the largest share of GOS and Personnel costs in all the domains except for the Industry domain, where large enterprises contributed to the largest share (Charts 3 and 4).

Limited liability companies (Ltd and PLC) generated 81.8 per cent of the GOS and 84.6 per cent of the Personnel costs, for activities forming part of the non-financial business economy (Table 4).

Average Personnel costs

On average, Personnel costs paid out by large enterprises amounted to €26,465 for each full-time equivalent employee. For the same criteria, medium enterprises paid out €25,436, while small and micro enterprises paid out €23,940 and €21,076 respectively (Table 3).

Main variables by locality

Enterprises with a registered address in Ħal , Marsa, , San Ġiljan and Tas- generated the largest aggregated amounts of GOS in the Maltese non-financial economy in 2019. Personnel costs were mostly paid out by enterprises concentrated in the Ħal Luqa, Marsa, Ħal , Birkirkara and San Ġiljan areas (Maps 1 and 2).

Table 1. NACE Rev. 2 Classification

Section Division Description A 01 - 03 Agriculture, forestry and fishing B 05 - 09 Mining and quarrying C 10 - 33 Manufacturing D 35 Electricity, gas, steam and air conditioning supply E 36 - 39 Water supply, sewerage, waste management and remediation activities F 41 - 43 Construction G 45 - 47 Wholesale and retail trade; repair of motor vehicles and motorcycles H 49 - 53 Transportation and storage I 55 - 56 Accommodation and food service activities J 58 - 63 Information and communication K 64 - 66 Financial and insurance activities L 68 Real estate activities M 69 - 75 Professional, scientific and technical activities N 77 - 82 Administrative and support service activities O 84 Public administration and defence; compulsory social security P 85 Education Q 86 - 88 Human health and social work activities R 90 - 93 Arts, entertainment and recreation S 94 - 96 Other service activities T 97 - 98 Activities of households as employers; undifferentiated goods- and services-producing activities of households for own use U 99 Activities of extraterritorial organisations and bodies

2 113 231 243 397 137 345 290 287 Investment in tangible assets 522 766 826 949 511 864 958 995 Personnel Costs 830 723 805 722 896 1,125 1,046 1,218 € million Surplus Gross Operating 3,483 3,063 984 3,882 3,328 1,059

2,758 3,634 3,989 6,498 3,056 3,881 4,676 7,048 Production siness Economy by size classification

3,933 5,372 6,002 8,936 4,114 5,577 6,773 9,621 2019 2018 Turnover 28,186 36,594 36,312 38,506 28,545 39,404 40,900 40,181 139,598 24,244 16,880 149,030 26,085 18,662 Employees no. 53,974 36,997 36,363 38,528 55,758 40,376 41,085 40,212 165,862 177,431 Persons employed Table 2. Performance of Enterprises within the Non-financial Bu 487 102 546 110 2,309 2,508 34,424 37,322 38,317 35,153 units Number of Micro Small Medium Large Micro Small Medium Large Total Total

3 6 36 54 37 18 25 19 17 50 26 31 68 68 145 632 108 215 136 169 259 assets in tangible Investment 36 40 48 66 44 29 217 219 144 615 135 112 183 273 564 657 540 486 283 1,966 3,328 1,059 Costs Personnel 9 98 82 50 73 60 164 149 220 493 113 104 393 838 289 526 578 437 617 2,470 3,882 € million Surplus Gross Operating

565 519 642 721 447 467 480 690 594 264 133 2,447 1,527 4,241 2,032 3,580 2,785 2,255 1,826 11,107 18,662 Production

449 465 474 689 587 265 130 2,269 1,586 3,148 2,834 9,836 1,518 4,327 2,017 2,775 3,559 2,256 1,814 11,172 26,085 Turnover 1 siness Economy by size classification and activity domain: 2019 8,131 1,389 9,252 9,635 2,307 2,672 3,006 5,617 5,388 2,406 9,267 9,647 1,282 74,869 28,408 25,272 19,800 23,057 18,376 11,421 in FTE Employees 9,257 1,583 2,571 2,764 5,697 9,647 3,035 5,763 2,718 9,719 1,277 10,097 10,430 84,119 31,367 27,602 22,005 23,897 20,513 13,999 Employees no. 1,590 6,654 2,818 5,806 4,768 3,051 5,777 1,277 9,721 10,149 10,767 16,612 98,441 39,118 13,800 27,624 22,108 26,072 20,985 27,724 Persons employed 4 22 66 42 65 18 165 759 196 282 274 9,000 9,946 4,723 4,965 2,459 2,824 1,271 20,582 18,971 38,317 177,431 149,030 135,601 units Number of Table 3. Performance of Enterprises within the Non-financial Bu Medium Small Micro Large Micro Small Large Small Medium Medium Micro Large Medium Large Small Micro Services (NACE H to N and S95, excl. K) Wholesale and retail trade (NACE G) Construction (NACE F) Industry (NACE B to E) Total Full-time equivalent. 1

4 1 50 68 940 1,059 Investment in tangible assets 16 282 215 2,815 3,328 Personnel Costs 2 67 139 5 3,175 3,882 € million Surplus Gross Operating 28 1,082 1,518 16,033 18,662 fer to methodological note 11. 29 1,495 2,397 22,164 26,085 Turnover Production siness Economy by Legal Organisation: 2019 1 1,034 6,605 14,780 in FTE Employees 1,059 6,900 17,507 Employees no. blic limited company. grouped as 'Other' in the legal organisation classification, re 1,099 6,995 44,390 Persons employed 114 159 Table 4. Performance of Enterprises within the Non-financial Bu 12,150 124,947 123,564 113,183 38,317 177,431 149,030 135,601 units Number of Sole owners and Partnerships 25,894 Ltd and PLC Non Profit 1. For SME classification refer to methodological note 5. 3. Branches, cooperatives, corporations and joint ventures are Other Total 2. Ltd stands for private limited company and PLC pu Full-time equivalent. Notes: 1

5 100 100 80 80 60 60 percent percent 40 40 Construction (NACE (NACE F)Construction 20 20 Services (NACE Services N (NACE K) andHto S95, excl. 0 0 Small Large Micro Micro Small Large

Medium Medium size class size size class size 100 100 80 80 60 60 percent per centper 40 40 Chart 2. Distribution of Gross Operating Surplus and Personnel Costs by domain size class: 2019 Industry B E)to Industry (NACE 20 20 Wholesale and retail trade (NACE (NACE Wholesaletraderetailand G) 0 0 Micro Small Micro Large Small Large

Medium Medium size class size size class size Note: Mixed income earned by self-employed are included as Gross operating surplus. refers to remuneration for work carried out the owners of unincorporated enterprises classified in It has both characteristics, those of wages and salaries, profits earned by the entrepreneurs. household sector.

6 Chart 3. Gross Operating Surplus composition by domain and size class: 2019

€3,882.1 million

Chart 4. Personnel costs composition by domain and size class: 2019

€3,328.1 million

7 Map 1. Aggregated total Gross Operating Surplus by locality of registered address (LAU 2): 2019

Note: The footprint of large enterprises is being allocated to the registered address of their respective headquarters, even if such enterprises may operate through branches across various localities.

Map 2. Aggregated total Personnel Costs by locality of registered address (LAU 2): 2019

Note: The footprint of large enterprises is being allocated to the registered address of their respective headquarters, even if such enterprises may operate through branches across various localities.

8 Map 3. Graphical Illustration of MALTA by LAU2 Classification

Key

1 Valletta 18 35 52 San Ġiljan 2 L-Imdina 19 Il-Fontana 36 53 San Ġwann 3 Il- 20 Il- 37 Il-Mellieħa 54 4 L-Isla 21 Il-Gżira 38 L-Imġarr 55 San Pawl Il-Baħar 5 Bormla 22 Għajnsielem and Comino 39 Il- 56 Ta' 6 Ħal Qormi 23 L-Għarb 40 L-Imqabba 57 Santa Luċija 7 Ħaż-Żebbuġ 24 Ħal Għargħur 41 L-Imsida 58 8 Ħaż-Żabbar 25 L-Għasri 42 Il- 59 Tas-Sliema 9 Is-Siġġiewi 26 Ħal Għaxaq 43 In- 60 Is- 10 Iż-Żejtun 27 Il-Ħamrun 44 In- 61 Ta' Xbiex 11 Ir-Rabat, Għawdex 28 L- 45 Raħal Ġdid 62 Ħal 12 Ħ' 29 Il- 46 Pembroke 63 Ix-Xagħra 13 Ħal 30 Ta' Kerċem 47 Tal-Pieta' 64 Ix- 14 Birkirkara 31 Ħal 48 Il-Qala 65 Ix-Xgħajra 15 Birżebbuġa 32 Ħal 49 Il- 66 Iż-Żebbuġ, Għawdex 16 Ħad- 33 Ħal Luqa 50 Ir-Rabat, Malta 67 Iż-Żurrieq 17 Il- 34 Il-Marsa 51 Ħal Safi 68 L-Imtarfa

9 Methodological Notes

1. Structural Business Statistics (SBS) aim to provide a cross-sectional view of the business economy based on the structure, performance and behaviour of the industries. Presented according to the activity classification, they cover industry, construction, trade and services production of businesses within the Maltese territory. These statistics can be broken down by domain and employment size class levels.

2. For reference year 2019, around 6,700 business units were randomly selected and contacted. A stratified random sample was used to cover industries in the non-financial business economy. For larger companies, a census survey was targeted. The questionnaire asked for details related to the performance of the enterprise during the financial year. The information collected was supplemented and supported by additional information extracted from administrative data sources. The data was grossed up to represent the total non-financial business population active during the year.

3. SBS data is not fully comparable to data produced by National Accounts for a number of reasons. These reasons include conceptual adjustments carried out by National Accounts (such as adjustments for production activities which are not captured in the activities reported by enterprises, including estimates to cover for the informal economy transactions), different coverage range of industries and other National Accounts adjustments (such as Financial Intermediation Services Indirectly Measured - FISIM). SBS data is unadjusted and reflects the official data reported by active resident enterprises operating in the non-financial business economy of Malta.

4. Definitions (based on Commission Regulation (EC) 250/2009):

• Turnover includes total sales and other operating income and is expressed net of VAT.

• Production measures the amount actually produced, based on sales, including changes in stocks and neutralising the impact of goods resold in the same condition as purchased.

• Gross operating surplus is the surplus generated by operating activities after the labour factor input has been recompensed. It can be calculated from the value added at factor cost less the Employee benefit expenses (personnel costs). Simply put, Gross operating surplus is a measure of profitability before accounting for interest, income taxes, depreciation, amortisation, revaluations and other provisions.

• Personnel costs are defined as the total remuneration, in cash or in kind, payable by an employer to an employee (regular and temporary employees as well as home workers) in return for work done by the latter during the reference period. Personnel costs also include taxes and employees' social security contributions retained by the unit as well as the employer's compulsory and voluntary social contributions.

• Investment in tangible assets is defined as investment during the reference period in all tangible goods. Included are new and existing tangible capital goods, whether bought from third parties or produced for own use (i.e. capitalised production of tangible capital goods), having a useful life of more than one year including non-produced tangible goods such as land. Investments in intangible and financial assets are excluded.

• Persons employed are people engaged in productive activities in an economy. The concept includes both employees and self-employed (i.e. inclusive of working proprietors, partners and unpaid family workers). The latter category may include persons who do not receive compensation in the form of wages, salaries, fees, gratuities, piecework pay or remuneration in kind.

• Number of employees is defined as those persons who work for an employer through a contract of employment and receive compensation in the form of wages, salaries, fees, gratuities, piecework pay or remuneration in kind.

• Number of employees in full time equivalent is a unit of measure which transforms the number of employees in a way which makes employees working a different number of hours per week comparable. This conversion is mainly relevant to part-time workers. The unit is obtained by comparing an employee's average number of hours worked to the average number of hours of a full-time worker. A full-time person is therefore counted as one FTE, while a part- time worker gets a score in proportion to the hours he or she works. For example, a part-time worker employed for 20 hours a week where full-time work consists of 40 hours, is counted as 0.5 in FTE.

10 5. SBS data in this news release was classified according to the SME classification in the Commission Recommendation 2003/361/EC “definition of micro, small and medium-sized enterprises adopted by the Commission”. The ceilings of this classification were applied to turnover and employment only (both criteria must be met by individual statistical units). The balance sheet total ceiling was not applied as such information is not available for statistical units involving self-employed. Users of this news release must appreciate that there is not a single definition of what a SME is. Other SME definitions may be used by other institutions, authors and publications. For instance, Eurostat defines SMEs solely based on the employment within an enterprise.

For this news release, the classification of SMEs was based on the following ceilings:

Company Staff Turnover Category headcount Medium < 250 ≤ € 50 m Small < 50 ≤ € 10 m Micro < 10 ≤ € 2 m

Companies that do not fall within these categories, i.e. either more than 249 employees or with turnover greater than €50 million, are considered as Large.

6. Enterprises may change their classification from one year to the other if significant changes occur in their respective NACE or employment.

7. Employees in Full-Time Equivalent are not available in Table 2 due to a methodological improvement strictly related to reference year 2019. Due to this improvement, the values of 2018 and 2019 are not entirely comparable.

8. Enterprises in this news release refer to legal units as statistical units for both 2018 and 2019. The classification aggregates may be impacted upon the implementation of the statistical unit 'Enterprise' as the reporting unit in the SBS. This intention is in line with Council Regulation (EEC) No 696/93.

9. The calculation of the growth rate may differ due to rounding.

10. The data for 2019 in this news release should be considered as provisional and subject to revision. The data for 2018 is final.

11. The public sector is excluded except for public corporations featuring in the non-financial business economy.

12. More information on statistical concepts, metadata and classifications relating to this news release may be accessed through the following link: https://metadata.nso.gov.mt

13. Further information on Structural Business Statistics is available on: https://ec.europa.eu/eurostat/web/structural-business-statistics Values available on Eurostat's database (Eurobase) differ from the values of this news release due to the different size classification and the cut-off thresholds applied on the values available on Eurobase.

14. References to this news release are to be cited appropriately.

15. A detailed news release calendar is available on: https://nso.gov.mt/en/News_Releases/Release_Calendar/Pages/News-Release-Calendar.aspx

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