Companies in Poland still have several problems. They talk loudly about them

The Polish Economic Institute (PIE) in cooperation with Bank Gospodarstwa Krajowego (BGK) has published the latest results of research on the sentiment of Polish entrepreneurs. After two weaker months, January saw a marked improvement. The monthly economic climate index (MIK) in January increased by 4.2 points to 110 points.

MIK is created monthly on the basis of measurements made in seven key areas of business activity: sales value, new orders, employment, wages, production capacity, capital expenditure and financial situation. It is assumed that a result above 100 points indicates good economic conditions.

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Compared to last year’s reading from January, there is a clear improvement. The index increased by as much as 13.9 points. It should be noted that a year ago it was below 100 pointswhich meant the predominance of negative moods.

Firms clearly evaluate their sales better (the point value of MIK in this case increased by 22.4 points) and employment (+8.9 points). New orders and production capacity recorded slightly smaller increases. However, compared to December last year, the assessment of financial liquidity (-1.7 points) and the approach to wages (-1.3 points) dropped slightly, but they still exceed the neutral value.

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– January brought a significant improvement in the mood of Polish entrepreneurs. It appears that this is mainly due to the increase in sales during the holiday season. In the January measurement, as much as 31 percent. entities declared an increase in sales in December compared to the previous month – comments Paula Kukołowicz, PIE expert.

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MIK – investments as the main problem

“In the current reading, only one component is below the neutral reading. It’s about investments which also throughout the last year did not exceed the neutral threshold“- economists point out.

They note that the highest reading of the investment index so far is 99.7 points. It reached this level in November 2021. Meanwhile in January 2022 it fell to just 88.8 points. Compared to December, it decreased by 5.7 points.

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It may be a consolation that the beginning of 2021 was even worse. Compared to that period investment ratings increased by 16.6 points.

– The current situation brings new challenges. They are diverse and concern, inter alia, rising energy prices, problems with the availability of employees and rising labor costs. All these factors translate into a high level of uncertainty related to the current economic situation, as indicated by the majority of the surveyed entrepreneurs – points out Paula Kukołowicz.

The main barriers to development

The latest PIE and BGK report shows that in the case of large companies, a slight decline in the assessment of the economic situation is noticeable, and more pronounced in small companies.

– In the case of the latter tax changes are a source of uncertaintywhich, due to the tax structure of these companies, have a greater impact on their financial position. The slight deterioration in the economic situation in large industrial companies is a consequence of the decline in foreign orders, visible in the Central Statistical Office data for December, to which large companies are more exposed, comments Konrad Soszyński, BGK expert.

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It is not only tax changes and a drop in orders that worry entrepreneurs. Soszyński points out that inflation is a big problem. Firms fear a decline in demand for certain products. Other concerns relate to energy prices and wages.

Concerns about wage increases mainly affect construction, trade and transport. These industries are not exposed to strong international competition. This means that the increase in costs generated by these factors may result in a general increase in prices for all entities – assesses the BGK expert.

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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