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Small Businesses Feel More Optimistic About Economy and Jobs, But Hesitant to Invest

BUSINESSSmall Businesses Feel More Optimistic About Economy and Jobs, But Hesitant to Invest

Small and micro companies do not want to invest, they do not plan increases or hire new employees, but their economic sentiment index in February 2024 rose to 48.4 versus 36.4 the previous year. This is according to the latest edition of Busometr, a report on the economic conditions in micro and small companies.

The Association of Entrepreneurs and Employers published the results of their original Busometr study tracking sentiments among small and micro entrepreneurs and their action plans for the coming quarters. The study carried out for over 10 years semi-annually provides significant information about the conditions of the micro and small business (MMF) sector in Poland.

In the latest wave of the Busometr study, the following levels were achieved:

– ‘Economic Situation’ achieved a score of 49.6, signaling neutral sentiments, however, it is much better than the previous year when it was 35.1 and two years earlier – 30.5.
– ‘Job Market’ achieved a score of 57.2, indicating relative optimism of entrepreneurs on employment and wages – 21% of respondents plan to increase employment and 72% do not plan changes. These are slightly better results than in previous years, with the index being 53.1 in 2023 and 54.4 the previous year.

‘Investments’ recorded a score of 33.5, which may indicate a drop in confidence in the investment perspective. As many as 59% of small and micro-enterprises do not plan any investments. In the last two years, the indicator oscillated at around 24.8 in 2023 and 24.1 in 2022.

Cezary Kaźmierczak, President of ZPP, commented on the results:

“The Polish economy is doing well, but for some time we have been drawing attention to the alarmingly low level of investments, especially in the segment of micro and small companies. This is due to several factors including uncertain laws, an inefficient dispute resolution system, a lack of financing, and high taxation. In terms of creditworthiness, micro, and small companies are assessed by banks in the same way as mid-sized ones, which put them in a very weak starting position. We still have weak capital accumulation, so-called ‘old money’ is missing, and this results in the absence of a stream of small investments which is necessary for the stabilization of the middle class and the development of small towns. Often, 100 companies employing 10 people each bring more value to sustainable development than one company employing 1000 workers.”

Study methodology: The study was conducted using the CAWI (Computer Assisted Web Interviews) method via online surveys on the Ariadna research panel among representatives of the micro and small enterprise sector. The total sample size was N=546.

Indices: The report presents the results in the form of percentage responses to individual questions and the values of standardized indices for the components: ‘Economic Situation’, ‘Job Market’ (divided into ‘Employment’ and ‘Wages’) and ‘Investments’. The values of the indicators ranged from 0 to 100, where results above 50 indicated positive tendencies for the given component.

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