Micro, small, and medium-sized entrepreneurs plan to raise their prices this year, according to a study by SME Scanner commissioned by BIG InfoMonitor. The main reason for this is rising labor costs, but it is not the only one. The representatives of the construction industry most commonly announce such increases.
In the third quarter of this year, nearly 55% of entrepreneurs reported increases, of which around 15% have already raised prices, and another 40% plan to do so by the end of the year. Taking into account both those who have already done so and those who announce changes, higher prices this year will be found in over 54% of micro-enterprises, 60% of small businesses, and 44% of medium-sized businesses. Every fifth medium-sized entrepreneur has not yet decided on possible price changes; only one in ten of the smallest companies has any doubts.
Renovations to Become More Expensive
Companies in the construction industry most often predict price increases – about 63%, and more than 16% of construction entrepreneurs have already raised their rates. Half of the representatives of the transport industry also plan to raise prices. There are slightly smaller “chances” of higher prices in services, trade, and industry. At the same time, almost 32% do not intend to increase prices, and more than 22% in this group are even considering lowering them.
Rising Labor and Energy Costs Drive Price Increases in Key Sectors
As entrepreneurs themselves point out, the main reason for price increases is the rising costs of labor. This burden is primarily on the industry and trade. The transport and construction sectors also struggle with increasing remunerations, but they more often see the cause of price increases in higher gas and electricity bills and inflation. This is also often pointed out by service companies.
“Entrepreneurs feel three factors that negatively affect costs: one of the highest interest rates in the EU, high labor costs – the planned minimum wage level for 2025 is PLN 4,626, and one of the highest energy prices. A new factor related to reconstruction in flood-affected areas has now been added, which will increase demand for construction materials and labor, and thus increase the cost of construction work,” comments dr hab. Waldemar Rogowski, chief analyst at BIG InfoMonitor.
Obstacle Course
As business admits, the last few years have brought many challenges. For a significant number of companies, the biggest difficulty is rapidly rising general costs as well as prices of materials and energy. Every fifth entrepreneur has also noticed a drop in sales. Finding suitable workers is just as challenging for many firms. 10% of micro, small and medium enterprises also face difficulty in maintaining financial liquidity and recovering debts from contractors.
“The difficult financial situation of SMEs results in a problem with settling their own liabilities on time. Arrears are now declared by almost 6% of micro, 17% of small and as much as 22% of medium-sized companies. The way to stop this snowball of overdue payments is effective management of receivables. For many entrepreneurs, the prospect of ending up in the debtor’s register is a motivation to pay their liabilities on time,” says Sławomir Grzelczak, President of BIG InfoMonitor.
Source: The “SME Scanner” survey conducted among micro, small and medium enterprises, conducted by the Keralla Research Institute of Research and B2B Solutions, on a sample of 500 companies selling with deferred payment terms, using telephone interviews, 3Q 2024.
Source: https://managerplus.pl/ponad-polowa-msp-planuje-podwyzki-cen-jeszcze-w-2024-roku-najwieksze-wzrosty-w-budownictwie-i-transporcie-32793
