Why Polish firms brace for profit losses

EPA/Marcin Bielecki

Renovation works on cranes in Szczecin, Poland.

Why Polish firms brace for profit losses


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A labour dearth is threatening to foil production at companies across eastern Europe.

With Polish unemployment in the region’s biggest economy at the lowest since 1991 and more than 2m Poles working abroad, companies are having to offer higher wages and invest in job training programmes for cutting-edge technologies that strain budgets.

As reported by Bloomberg, the percent of Polish employers reporting difficulties finding workers has jumped to almost 51% from 35% a year ago. This means an “employee market” that raises the risk of delays, according to Poland’s biggest homebuilder, Dom Development SA.

That’s already happening. London-based research firm IHS Markit in August indicated a rise in work backlogs for Polish manufacturers for the first time since February 2015. Firms cited shortages of labour and supply constraints as potential causes.

“The situation of a falling jobless rate and growing employment is very unfavourable from the economy’s point of view as it has to translate into wage pressure,” said Jaroslaw Janecki, the chief economist at Societe Generale SA in Warsaw. “The labour market could well be the biggest risk for the Polish economy in the coming quarters.”

With the unemployment rate at 4.8% in July, compared with the EU average of 7.7%, and the employment ratio close to a record 54%, demand for employees boosted wage increase through July by an average 5% a month, the fastest pace in six years.

For instance, Biedronka, the Polish grocery retailer owned by Jeronimo Martins SPGS of Portugal that has about 60,000 employees, raised salaries for a third time in a year in April, echoing increases by the Lidl and Kaufland chains. Cashiers with three years of experience earn a monthly base salary of 2,750 zloty (€638), or 25% more than a year earlier, outstripping a 16% increase in sales in the second quarter.

But as long as Polish wages remain lower than in western Europe, Poles will still seek better pay abroad, cutting the pool of qualified workers at home, executives say. The average annual salary for Poland is €21,645, compared with €38,737 in neighbouring Germany, according to the Organisation for Economic Cooperation and Development.

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