Methodological Notes

1. 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 main variables referred to in this news release, for both 2021 and 2022, 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. The data in this news release is therefore not strictly comparable with previous releases, whereby data was presented at ‘Legal’ unit level.  An ‘Enterprise’ is a market-oriented organisation that is autonomous in decision-making and may operate in more than one location. For most small firms, an enterprise is the same as a legal unit. However, for larger interconnected businesses, multiple legal units are treated as an ‘Enterprise’ in the form of a group of legal units under common control.

2. 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.

3. For reference year 2022, around 6,100 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.

4. The domain 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.

5. The business activities covered by the SBS have been extended following the implementation of the European Business Statistics (EBS) regulation 2019/2152 from reference year 2021. NACE Sections B to N and P to S (excluding S94) are now covered by the SBS survey.

6. The financial sector covered by the Structural Business Statistics (NACEs 64-66) does not feature in this news release.

7. 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). Additionally, the information published in this release is still not included in National Accounts. Thus, data published so far by National Accounts might not necessarily reflect some of the trends published in this release. SBS data is unadjusted and reflects the official data reported by active resident enterprises operating in the non-financial business economy of Malta. 

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.

● 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 Eurobase 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.

● Combined Gross operating surplus and Employee benefits expense equates to gross income, which in technical terms is referred to as Gross value added (GVA).

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 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.