Companies’ investment sentiment remains weakened, according to a survey conducted by the National Bank of Poland (NBP) in June. Sentiment has worsened among larger companies, which have reduced interest in new investments and are more likely to abandon projects they have started.
According to the NBP’s SM results, investment sentiment in the SNP – despite a renewed improvement – remains weakened. The OPTIN index increased for the second consecutive quarter, but its level is still very low (3rd decile). Admittedly, the percentage of firms planning to increase the volume of outlays in a quarterly perspective has equalled the percentage of investors intending to decrease them (cf. Figure 114), and in an annual perspective the advantage of the former group of firms has increased to the level of the multi-year average. However, the dynamics of investment growth in the following quarters may still be limited by the low interest of companies in undertaking new ventures (about 20% of companies will start them), according to the report ‘NBP Quick Monitoring – analysis of the situation of the business sector’.
It stressed that investment sentiment remained diversified by industry: in manufacturing and services it improved, while deterioration – albeit from favourable levels – occurred in energy, mining and water supply.
Investment sentiment of large enterprises deteriorated in Q3; the share of investors with more than 2,000 employees planning to start new investments fell by 2.9 percentage points compared to the previous quarter (to 43.1%). At the same time, the share of enterprises limiting or abandoning investments they had started increased strongly – by 6.7 percentage points compared to the previous quarter, NBP reported.
On the other hand, the employment-weighted balances of outlays planned in the coming quarter and year remained at a high level, indicating that large companies continue to anticipate an increase in the scale of investments. The plans to increase outlays, with a reduction in the scope of ongoing investments and a smaller number of new investment projects in some firms, may result, among other things, from an increase in nominal investment costs, forcing changes in the structure and time distribution of these projects, it further announced.
The last SM survey took place in June 2023. The SM survey included 2 642 entities selected from across the country. These included businesses in the non-financial sector representing all sections of the Polish Classification of Activities (PKD) except agriculture, forestry and fishing, both ownership sectors, businesses in the SME sector and large entities.
Source: NBP and ISBnews
