Even though inflation is increasing in Poland, entrepreneurs are becoming less fearful of it. The results from the fourth quarter of last year showed that only 13% of companies believe that their business’ condition could deteriorate due to inflation. This is 11 percentage points less than the previous quarter and more than three times less than a year ago (44% in the fourth quarter of 2023). The hospitality industry and retail companies feel the most threatened by inflation, with responses of 23% and 16% respectively. The least concerned about rising prices are the transport companies (6%).
“In the second half of this year, inflation started to rise, but this was expected, especially due to the increase in energy prices. And the forecasts also leave no illusions, inflation will continue to rise in the next few months. However, because this factor is predictable, it does not pose such a significant threat to the operations of Polish companies. Therefore, inflationary fears are gradually declining and are currently at the lowest level since the start of the study. What’s more, for the second time in a row, inflation was not identified by entrepreneurs as the element that raises their biggest fears. They are more afraid of further increases in business costs such as renting premises or fleet costs,” says Radosław Woźniak, President of the EFL Board.
According to the EFL Barometer for the fourth quarter of this year, inflation was a concern for a small group of Polish entrepreneurs. Only 13% of companies think that rising prices will negatively affect their business in the coming months. Compared to the previous quarter’s measurement, the result is 11 percentage points lower (24% in the third quarter of 2024). A high percentage of entrepreneurs foresee a stagnation of the situation (60% vs. 43% in the third quarter of 2024). One in five representatives of SMEs is uncertain about the direction of the upcoming situation (20% vs. 24% in the third quarter).
The situation is noticeably improving when comparing the results on a yearly basis. In the fourth quarter of 2023, 44% of companies were afraid of the negative impact of inflation on their business, more than three times as many as now.
Taking into account company size, like a quarter earlier, the larger the company, the less fearful it is of the negative impact of inflation on its business. 7% of mid-sized companies think that their business activity may worsen in the coming months due to high inflation. In the group of small and micro-companies, this percentage is 12% and 18% respectively.
The perception of inflation varies from industry to industry. The highest percentage of entrepreneurs who fear the adverse effects of inflation on their business is among representatives of HoReCa (23%) and trade (16%). Transport companies are the least concerned about their future in relation to inflation, with only 6% of those surveyed afraid of the negative effects of rising prices on their operations, and production companies (7% indicating concern).
It is worth noting, however, that in every sector both on a quarterly and yearly basis, significantly fewer companies have inflation concerns.
According to the EFL Barometer for the fourth quarter of 2024, the fear of inflation for the second time in a row no longer ranks first among entrepreneurs’ concerns. Currently, every fourth entrepreneur fears this aspect (25%), while three months ago it was 26%, and in the second quarter of this year as much as 34%.
The most significant concern for companies is the increase in the cost of conducting economic activity (30%). In the previous quarter, 32% of entrepreneurs pointed to this factor. Those surveyed are slightly more afraid of falling demand than in the previous measurement (18% vs. 16%). However, the fear of a lack of workers is about the same (12%), which may be related to the demand for seasonal workers.
“Looking at the biggest worries of entrepreneurs over the last few measurements, an optimistic trend becomes apparent. The percentage of mentions of elements such as inflation or operating costs is decreasing. Just a year ago or at the start of this year, even 70% of entrepreneurs were afraid of these factors, today this group is significantly smaller. The current business environment does not necessarily favor the development of companies the way we would like, but it is more predictable,” says Radosław Woźniak from EFL.
The main index of the EFL Barometer for the fourth quarter of 2024 was 50.6 points. The achieved level is 0.6 points lower than in the third quarter of 2024.
Source: https://managerplus.pl/firmy-w-polsce-coraz-mniej-obawiaja-sie-inflacji-koszty-dzialalnosci-najwiekszym-wyzwaniem-53684
