Methodological Notes

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

2. The main variables referred to in this news release, for both 2023 and 2024, refer to statistical units as compiled and transmitted to Eurostat at statistical unit ‘Enterprise’ level. This is in accordance with Council Regulation (EEC) No 696/93.

During the consolidation of enterprises for statistical purposes units classified under NACE Rev. 2 division 64.20 (Activities of holding companies) that provide services to the enterprises they are a part of are considered part of the non-financial business economy and as such are not treated as part of the financial population.

3. 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 activity and employment size class levels.

4. For reference year 2024, around 6,280 business units were selected and contacted. A 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 under review. 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.

5. The domain activity names used in this news release are not internationally recognised but were established internally taking into account the respective domestic industry categories, national exigencies and the users’ needs.

6. The business activities covered by SBS are defined under the European Business Statistics (EBS) regulation (EU) 2019/2152. The SBS survey covers NACE Sections B to N and P to S, excluding S94. Activities classified under Section K (Financial and insurance activities, NACE 64–66) are not included in this news release. Sections A (Agriculture and Fisheries) and O (Public administration) are also excluded.

7. SBS data is not fully comparable with data produced by National Accounts due to some conceptual and methodological differences. These include adjustments made in National Accounts for production activities not captured in enterprise reporting, such as estimates related to informal economy transactions, as well as methodological concepts such as Financial Intermediation Services Indirectly Measured (FISIM). SBS data is unadjusted and reflects the official values reported by active resident enterprises operating in the non-financial business economy of Malta, based on data as reported by businesses.

8. Definitions (based on the Commission Implementing Regulation (EU) 2020/1197):

● Net turnover includes total sales and other operating income and is expressed net of VAT.

● Value of output 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.

● Value added represents the value a business adds through its production process. It reflects the net contribution of a business to the economy and is equivalent to the combined Gross operating surplus and Employee benefits expense.

● Gross operating surplus is the surplus generated by operating activities after the labour factor input has been recompensed. It can be calculated from the Gross value added less the Employee benefits expenses. Simply put, Gross operating surplus is a measure of profitability before accounting for interest, income taxes, depreciation, amortisation, revaluations, provisions and other non-operating expenses.

● Employee benefits expense is 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. Employee benefits expenses also include taxes and employees’ social security contributions retained by the unit as well as the employer’s compulsory and voluntary social contributions.

● Gross investment in tangible non-current 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. The name used for this variable by Eurostat in the Database is Number of employees and self-employed persons.

● 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 units 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.

9. 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 Net 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.