SMEs need to invest in the future

In the first three quarters of 2006, investment in SMEs increased by 24 percent. Simultaneously, revenues grew by 14 percent and costs by 13.3 percent.

According to Małgorzata Starczewska-Krzysztoszek, from the Polish Confederation of Private Employers (PKPP) Lewiatan, this means that companies' profitability is rising. "After nine months, the net financial result amounted to zł.50.7 billion, which is almost the same as in 2005. The number of companies bringing a net profit is rising. Now there are 74.2 percent of them," she says.

Exports are growing. Some 49 percent of companies now sell their products abroad and the share of exports in total sales is also on the up. Companies are increasing employment as well as wages, and, according to the National Bank of Poland (NBP), at the end of Q3 the average production capacity in a firm was hitting 81.7 percent.

"It is a rule that investments rise if production capacity approaches 80 percent. Today we have passed the threshold and investments do grow, but their share in GDP is the lowest compared to all new EU member states," says Strczewska-Krzysztoszek.

She also points out that companies are taking more loans, up 10 percent since September 2005. At the same time deposits have grown by 19 percent.

"This means that, in a sense, money lies unused by enterprises," adds Starczewska-Krzysztoszek.