Services turnover jumps 7.6% but employment slips as wage pressures build
NSO data shows 7.6% quarterly rise in services turnover, led by wholesale trade. Employment dips 1.1% while wages and hours edge up.
The National Statistics Office reported a 7.6% quarterly increase in seasonally adjusted services turnover for the second quarter of 2026. The headline figure masks a diverging picture across sectors.
Wholesale trade surged 38.5% compared to the first quarter, the strongest performer by a wide margin. Real estate activities rose 8.9%, transportation and storage gained 4.2%, and administrative and support services climbed 3.2%. Accommodation and food services were up 3.1%, retail trade 1.8%, and information and communication 1.0%.
But turnover declined in professional, scientific and technical activities by 1.1%, and motor vehicles trade slipped 0.7%. These sectors face headwinds even as the broader services index expands.
Employment across the services sector dropped 1.1% in the quarter. At the same time, gross wages and salaries rose 0.8% and hours worked increased 0.8%. That suggests the remaining workforce is being paid more, a sign of tightening labour costs.
On an annual basis, total services turnover was 10.4% higher than the second quarter of 2025. Wholesale trade led again with a 30.9% jump. Administrative and support services rose 10.3%, accommodation and food services 8.2%, retail trade 6.0%, motor vehicles 4.9%, information and communication 4.3%, transportation and storage 2.6%, and professional, scientific and technical activities 0.6%.
The only sector to record an annual decline was real estate, down 4.3%.
Year-on-year employment fell 2.9% and hours worked dropped 1.2%. Yet gross wages and salaries increased 3.2%, pointing to wage inflation as businesses compete for a shrinking pool of workers.
For Maltese businesses, the data highlights a two-speed economy. Wholesale and support services are booming, suggesting strong domestic demand and re-export activity. Real estate's annual drop may indicate cooling property market dynamics.
The combination of falling employment and rising wages is a critical trend to watch. Companies may face higher payroll costs even as some sectors see robust turnover growth. Businesses in professional services and motor vehicle trade should assess why their revenues are contracting while the broader index rises.
The outlook remains positive overall, but the uneven sector performance and wage pressure require careful planning. The services sector is Malta's economic backbone, and these shifts carry implications for investment and hiring strategies in the months ahead.