Tuesday, 17 March 2009

Poland's economy - upturn in sight?

Yesterday's Gazeta Wyborcza's jobs section had a very upbeat cover story - that the mass redundancies being announced across Poland are overshadowed by the numbers of new vacancies appearing in labour offices. The number of people registering as jobless has almost halved - from 160,000 in January to 84,000 last month. Inward investment is driving the new job growth. Large corporations desperate to cut costs in the west are moving production and outsourcing services to Poland. Companies like Tesco, Shell, Hewlett-Packard, Gillette, Indesit, Reuters, Fiat, Dell, Thomson-Reuters, IBM and some more I can't mention yet are all increasing their investments in Poland and creating new jobs here. Click here for an English language story based on the Gazeta article.

The recent weakening of the zloty (from 3.20 to 4.90 to the euro - a fall of over 50%), has made Poland attractive once again to inward investors. Their euros, dollars and pounds go much further in terms of buying land, building factories and hiring workers. The zloty has bounced back in the last month (from 4.90 to 4.50 to the euro), but Polish workers are still three times cheaper than their counterparts in the west and the Polish economy is still showing signs of life. New car sales are up, consumer spending is up (just), so the domestic market is also seen as attractive by foreign investors. Another beneficial side effect of the zloty's slide is a fall in Poland's trade deficit, with imports falling much faster than exports.

Worth taking a look at Poland's labour market a year ago to see how quickly things have changed.

UPDATE: I had an insight today about why unemployment in Polish cities is so low, and in the surrounding countryside it's so high. A contribution to this is the effect of many young Poles, who left rural parts to work in the cities, not registering themselves (the meldunek) in their new residencies. They remain registered where they came from. When they lose their urban jobs, they return to their small towns and villages and sign on there. It's estimated that 2.7 million people actually live in Warsaw, compared to 1.9 million actually registered there. So job losses in Warsaw hit communities all over Poland, and don't so up in the official stats.

1 comment:

Bartek Usniacki said...

The economy's performance is to a large degree dependent on the moods of market's participants (investors, enterpreneurs, consumers, etc.). If you made them all believe crisis was not going to affect Poland for sure and there was no reason to worry about the future, you would a substancial rebound in ecenomic activity - it's a matter of psychology. The economists who underappreciate its contribution into economic processes will usually fail to forecast the futures figeures describing economies, markets etc. BTW, nice to see an upbeat outlook among the gloomy forecasts of almost shrinking economy.
The labour market has indeed changed. But as far as I noticed none of the banks backed out of internship programmmes for the students (cheap labour force to shift the worst job into?). I'll be trying to measure employers' confidence during the biggest job fair for students (Dni Kariery, 31 March, Palace of Culture and Science) - if they're still trying to attract students - there's no need to worry. regards