Magazine
19:44 31 July 2021
Post by: WBJ

Assessment of the economic situation and investors' expectations in Poland

Foreign investors expect an improvement in the economic situation in Poland this year, both for the entire economy and for their companies. At the same time, satisfaction with the factors determining the business climate has increased — this is what the latest survey of the economic situation conducted by the Polish-German Chamber of Industry and Commerce (AHK Polska) among member companies and members of the chambers of the international IGCC network shows. BY POLISH-GERMAN CHAMBER OF INDUSTRY AND COMMERCE (AHK POLSKA)

Assessment of the economic situation and investors' expectations in Poland

Although the overall economic situation was assessed worse than in previous years due to the coronavirus pandemic, according to their own declarations, most companies are in a stable situation and expect an increase in sales as well as an increase in investments," emphasizes Dr. Lars Gutheil, managing director of AHK Poland. "Compared to other European locations, the country [Poland], therefore, continues to be at the forefront of attractiveness for multinational companies." The survey shows that many more companies plan to increase employment than to reduce it. Similarly, every third investor would like to increase their investment expenditure in Poland.

Among the factors influencing the attractiveness of running a business in Poland, the surveyed companies rated membership in the EU the highest (93.3% of positive opinions). Poland also highly values the qualifications of its employees as well as the quality and availability of local suppliers. However, according to Gutheil, there are also threats to its location. For example, respondents rate the fight against corruption and crime, labor law flexibility and labor costs as lower than in the past. The worst assessed are the unpredictability of economic policy (66% of negative assessments) and the country's political and social instability (55%).


THE IMPACT OF THE CORONAVIRUS PANDEMIC

The study also looks at the economic consequences of the coronavirus pandemic separately. Overall 39.9% of the surveyed entrepreneurs say that they had already returned to sales results as "before the coronavirus." However, nearly 30% do not expect to return to pre-crisis levels by 2022 and 16% even later. The long-term consequence of the crisis may be a change in the shape of global supply chains. This is expected to be beneficial for Central and Eastern Europe, with existing manufacturing plants in Poland not being relocated. As many as 60% of companies surveyed do not consider relocating their plants and 31% believe a relocation is unlikely. However, relatively high prices of energy and raw materials in the country seem to be problematic, which are assessed as the greatest threat to business development in the coming year.


POLAND'S INVESTMENT ATTRACTIVENESS AS A PLACE FOR DOING BUSINESS

Poland is at the forefront of the most attractive investment locations in the region, just behind Estonia and the Czech Republic (3rd place out of 20 locations). The vast majority of the surveyed companies — 96% — would choose Poland again as a place of investment. This is the highest percentage ever recorded by the Chamber in the survey.


ECONOMIC SITUATION AND EXPECTATIONS

At first glance, there are not many surprises here: after the economic slowdown in 2020, most companies in Poland expect a recovery this year, both for the entire economy and for their own company. More than four out of five surveyed companies predict that sales will increase or remain at the same level. The condition of the Polish economy is positively assessed by 68.8% of the surveyed companies. However, last year it was 87.7%.


EMPLOYMENT GROWTH AND SHORTAGE OF QUALIFIED PERSONNEL

More than one-third of the surveyed companies expect an increase in the number of employees. In the opinion of the surveyed entrepreneurs, the shortage of employees primarily affects the increase in labor costs and causes disruptions in current production.

The availability of skilled workers has improved compared to previous years, but with the expected economic recovery, labor shortages could increase again this year.


ECONOMIC POLICY

One of the most important factors influencing the attractiveness of running a business in Poland is membership in the EU. More than half of the respondents are in favor of Poland joining the Eurozone. The fight against corruption and crime, the flexibility of labor law, labor costs, as well as the unpredictability of economic policy and the country's political and social instability, the tax system and tax burdens are assessed as low. 


INFORMATION ABOUT THE STUDY

AHK Polska conducted the study between March 15 and April 16 through an online survey among member companies of chambers and international chambers associated with the Network of International Chambers in Poland (IGCC). A total of 241 managers participated in the survey. The economic survey focuses primarily on assessing the economic situation and prospects, as well as assessing the quality of locations among member companies. The research results were presented at a virtual press conference on May 20. 


AHK Polska survey cheatsheet

• Among the factors influencing the attractiveness of running a business in Poland, the surveyed companies rated membership in the EU the highest (93.3% of positive opinions).

• Respondents rate the fight against corruption and crime, labor law flexibility and labor costs lower than in the past. The worst assessed are the unpredictability of economic policy (66% of negative assessments) and the country's political and social instability (55%).

• Overall 39.9% of the surveyed entrepreneurs say that they had already returned to sales results as "before the coronavirus."

• Nearly 30% do not expect to return to pre-crisis levels by 2022 and 16% even later.

• The long-term consequence of the crisis may be a change in the shape of global supply chains. This is expected to be beneficial for Central and Eastern Europe, with existing manufacturing plants in Poland not being relocated.

• As many as 60% of companies surveyed do not consider relocating their plants and 31% believe a relocation is unlikely.

• Relatively high prices of energy and raw materials in the country seem to be problematic, which are assessed as the greatest threat to business development in the coming year.

• The vast majority of the surveyed companies — 96% — would choose Poland again as a place of investment. This is the highest percentage ever recorded by the Chamber in the survey.

• After the economic slowdown in 2020, most companies in Poland expect a recovery this year, both for the entire economy and for their own company. More than four out of five surveyed companies predict that sales will increase or remain at the same level.

• The condition of the Polish economy is positively assessed by 68.8% of the surveyed companies. However, last year it was 87.7%.


poland
business climate
ahk polska

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