The Leading Business Climate Index (WWK), informing in advance about future trends in the economy, fell by 0.1pts m/m in October this year to 166.9 points, the Biuro Inwestycji & Cykli Ekonomicznych (BIEC) reported in their report. Over the last three months, a reversal of the index’s upward trend has been observed, and entrepreneurs show lower interest in investments than in the previous year.
The most negative signals come from the data showing the scale of demand, where rising prices effectively limit consumption. Increasingly difficult and more expensive access to raw materials and semi-finished products, interruptions in their supply and rising prices do not give hope for a quick stabilization of producer prices. The dominant uncertainty about what to do next. the course of the pandemic, the uncertainty related to changes in the tax system make enterprises very skeptical in planning investments both for the current and the coming years, according to the report.
Of the eight components of the index in October this year. two have improved compared to the previous month, three have not changed significantly and three have deteriorated, it was announced.
BIEC points out that the slowing down of the inflow of new orders continues. The advantage of the percentage of companies experiencing a decline in the pace of orders over the percentage of those experiencing their increase in car manufacturing companies reached approx. 30% in October. A year ago, there was an approx. 30% advantage of companies experiencing an increase in orders over those that indicated their decline.
These are not significant and sudden declines, but they clearly indicate a weakening domestic and foreign demand. Moreover, representatives of companies forecast a further deterioration in the scale of orders in the next six months. The biggest drops in orders concern the automotive industry, according to the report.
Entrepreneurs point to a high increase in costs:
The average annual increase in producer prices (PPI) in September this year exceeded 10%, interruptions in the supply of raw materials and semi-finished products raise their prices, as indicated by every third entrepreneur; labor costs are rising – more than half of the surveyed representatives of the manufacturing sector companies report that; prices are rising energy and fuels, while the increase in taxes for over 46% of entrepreneurs surveyed by the Central Statistical Office is a significant barrier to further development, stated the report.
Source: BIEC and ISBnews
