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Foreign investors in Poland are generally happy with Poland’s economic situation, and expect an improvement this year, for their companies, their sectors and for the economy as a whole. At the same time, satisfaction with the factors determining the business climate has increased. These are the findings of this year’s business climate survey conducted among companies affiliated with the International Group of Chambers of Commerce network (including the BPCC) by the Polish-German Chamber of Industry and Commerce (AHK Poland)
Poland once again came in the Top Three countries across the 20 economies of Central and Eastern Europe in terms of where investors are happy to be, after Estonia and Czechia. Poland has been in the Top Three since 2010, but is no longer Number One, as it was between 2013 and 2015. The vast majority of the surveyed companies - 96% - would choose Poland as an investment destination again. This is the highest percentage ever recorded since the survey was initiated in 2006.
The survey shows that significantly more companies plan to increase employment than to reduce it. Similarly, one in three investors would like to increase their investment spending in Poland.
Among the factors that influence the attractiveness of doing business in Poland, respondents rate EU membership as the most important (93.3%). Poland also rates highly for the skill and motivation of its workforce and the quality and availability of local suppliers. However, according to Dr Gutheil, there are also threats to this location. For example, respondents rate creeping corruption, the inflexibility of labour laws and rising labour costs as negative factors, assessing them as lower than in past surveys. The unpredictability of economic policy (66% of negative ratings) and the country's political stability (55%) were rated worst. Relatively high prices of energy in Poland are assessed as the greatest threat to business development in the coming year.
Impact of the coronavirus pandemic
Carried out at the height of the third wave of the pandemic, when new restrictions were being imposed on businesses, the survey also analysed the economic consequences of the pandemic. 39.9% of the managers surveyed said that they had already returned to pre-pandemic sales levels. However, almost 30% do not expect to return to pre-crisis levels until 2022, and 16% even later. A long-term consequence of the crisis could be the reshaping of global supply chains. This is expected to benefit the CEE region, with very little threat that existing plants in Poland would be relocated. Only 6% of respondents said that this was the case for their companies, whilst 60% of companies surveyed are not considering relocating their plants, and 31% believe that relocation is unlikely.
Economic situation and expectations
After a slowdown in 2020, most companies in Poland expect a recovery this year. More than four out of five companies surveyed predict that sales will increase or remain at the same level. The state of the Polish economy is assessed positively by 68.8% of the surveyed companies. However, last year it was 87.7%. An increase in the number of employees is expected by over one third of the surveyed companies. In the opinion of the respondents, the shortage of employees knocks on into increased labour costs and disruptions in workflow. The availability of skilled workers has improved compared to previous years, but with the expected economic recovery, labour shortages may increase again this year.
Economic policy
Among the most important factors influencing the attractiveness of doing business in Poland is membership in the EU (63% rating this factor as being of the highest importance). More than half of the respondents are in favour of Poland adopting the euro. Low ratings are given to the fight against corruption, the inflexibility of labour laws, rising labour costs, as well as the lack of predictability and of economic policy and the political stability of the country, an overly complicated tax system and the administrative burdens associated with that.
Information about the survey:
AHK Polska conducted an online survey of member companies of chambers and international chambers affiliated with the International Group of Chambers in Poland (IGCC) including members of the BPCC, from 15 March to 16 April. A total of 241 managers took part in the survey, which focused on the assessment of the economic situation and prospects, as well as the assessment of the quality of the location among member companies.
The Polish version of the report is available at the following link: Polska w ocenie inwestorów zagranicznych
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