In March 2023, the Monthly Confidence Index (MIK) increased by 0.4 points from February to 94.1 points, but fell by 3.3 points from January this year. According to the Polish Economic Institute (PIE), since August 2022 the MIK is below the neutral level (100.0), indicating the predominance of negative business sentiment.

It also shows a drop (by 8.3 pts) from last year’s March reading (102.4 pts), which signified a positive assessment of the economic situation in the Polish economy. As emphasised by PIE, the MIK values remaining below the neutral level over the last eight months reflect entrepreneurs’ concerns about uncertain economic conditions, inflation, and rising business costs. 

The March MIK reading indicates a continuation of negative business sentiment. This is the eighth consecutive negative reading. “Companies that reported a decline in the value of sales and the number of new orders still outnumber the firms declaring an increase”, comments Anna Szymańska, an analyst from PIE’s economic foresight team. 

In spite of this, declarations of salary increase still prevail in companies. At the same time, as many as 80 % of companies say that they are trying to implement measures to support employees during inflation by increasing their salaries or offering salary supplements.

Among sectors, industrial production is currently doing best, and is distinguished above all by better liquidity, according to PIE analysts. In other sectors, negative sentiment prevails. The weak investment activity in trade and services is noteworthy. The situation is worst in the construction industry. The pressure to raise wages in this industry related to the increase in the minimum wage has resulted in a deterioration of liquidity in construction companies.

Adrian Andrzejewski