73% of Polish Companies Confident About Export Prospects for 2024: After the Storm, Comes the Sun? Despite a general confidence, Polish managers are the least optimistic compared to their international counterparts, maintaining a cautious approach.
Polish Companies – Embracing Modern Solutions While Recognizing Risks
Last year’s survey already placed Polish companies at the forefront in terms of prioritizing digitization and IT as pillars for their expansion and growth – this trend continues in 2024. Alongside Chinese companies, Polish firms are significantly utilizing AI to enhance supply chain management (with as many as 36% of surveyed Polish companies!), identifying export opportunities, and facilitating communication (20% and 22%, respectively).
Polish companies also recognize potential threats – 70% of them express concerns about geopolitical factors (wars, elections, and market volatility, leading to protectionism and trade barriers). Polish exporters also worry about increasing issues with payment delays, as they face the highest risk of late payments compared to other markets surveyed – 32% of Polish companies receive export receivables after 70 days or more, while such terms are reported by only 11-15% of companies in the UK, France, and Spain! Are Polish companies in a weaker position (and brand) against buyers, or are they more willing to take risks in their expansion by venturing into new markets with potentially longer payment terms as a business strategy? Sławomir Bąk, Risk Assessment Board Member at Allianz Trade in Poland, assesses that Polish exporters still have much to improve in speeding up receivables turnover compared to companies from other countries.
High Costs at Home – A Threat to the Polonization of Supply Chains
The most common business risk identified by Polish companies was high costs – operational, trade, and investment (83% of Polish respondents!). This clarifies why Polish firms are the least likely to consider relocating their supply chains back home. Only 16% of Polish exporters, the least among other surveyed markets, are considering accelerating the development of their local supply chains. “This is logical – high costs and overall financing availability in Poland, some of the highest energy costs in Europe, decreasing labor availability (the lowest unemployment in the EU), and the closure of significant supply markets in the East currently do not favor profitability and business continuity in sourcing from Polish subcontractors,” summarizes Sławomir Bąk.
Optimistic Déjà Vu: Are Companies Underestimating Risks Again?
In the 2023 edition of our global survey, 70% of the companies anticipated a growth in business turnover generated through exports. However, the year ended in a trade recession, and demand slowed more than expected. The 2024 outlook suggests an end to the recession, but are companies too optimistic again? In the latest survey, 82% of corporations expect a rise in business turnover from exports in 2024, particularly in consumer-related sectors such as retail, household products, and IT and telecommunications. In fact, nearly 40% of companies expect a significant (more than 5%) increase in export turnover for 2024 (more by +18 percentage points compared to 2023).
“After over a year of recession, exporters now anticipate a rebound in the latter half of 2024, as industrial goods stock replenishment picks up pace along with global demand. This will also lead to rising prices and reflation: Globally, 8 out of 10 companies expect an increase in export prices in 2024, thus supporting their export turnover. Our forecasts are more conservative: We expect global trade to rise by +2.8% in value terms in 2024 after a drop of -2.9% in 2023. This is well below the long-term average of +5%, reflecting the risk of disruptions in global shipping, such as the crisis in the Red Sea, and increasing protectionism,” explains Françoise Huang, Senior Economist for Asia, Australia, Oceania, and Global Trade at Allianz Trade.
To support exports, enterprises have varied priorities. French and American exporters advocate for the development of new products, while German, Spanish, and Chinese exporters aim to reach new markets. British exporters prioritize domestic investments in 2024.
The Risk of Non-payment Remains a Top Concern for Exporters
Despite optimism, exporters remain aware of the risks that weigh on their international development. Globally, companies primarily fear geopolitical risks, shortages of production factors/labor, and financial issues. The risk of non-payment remains at the forefront.
“It turns out that around the world, nearly 70% of companies receive payments within 30 to 70 days, with slightly more in the UK, France, and the USA. In the context of lower economic growth, trade disruptions, and geopolitical uncertainty, 42% of companies currently expect an extension of payment terms for export payments over the next six to twelve months. Longer payment terms mean greater pressure on cash flows, and the situation may even worsen. Moreover, 40% of respondents expect an increase in the risk of non-payment in 2024. This aligns with our forecast of a +9% increase in corporate insolvencies this year,” adds Aylin Somersan Coqui, CEO of Allianz Trade.
