In April 23% of the surveyed retailers signalled an improvement and 13% a deterioration in business conditions. As in March, only the smallest businesses, those employing nine people and less, were pessimistic. Larger retailers, i.e. those employing more than nine people, had an optimistic outlook on the general economic situation and sales in the next three months.
Some 5.2% of the surveyed retailers said they saw no barriers to their current business operations. The remainder signalled the following major barriers: market competition (signalled by 69% of the surveyed retailers), high labour costs (63%) and high fiscal burdens (55%). Compared to April last year, the barrier created by market competition diminished the most. In most cases, retailers chose the following sources to finance their working capital: own resources (69%), bank loans (28%) and open account (24%).
Individual segments of the retail sector made different assessments of the business climate. Retailers selling furniture, radio and television equipment, household appliances, motor vehicles, textiles, clothes and footwear were the most optimistic in April. The outlook in the food sector improved.
As regards the remaining groups of service enterprises, the outlook on business conditions was the most positive in the financial services sector. The outlook in this sector has been very favourable since the beginning of 2005. In April 2008 the outlook was better than in March. 64% of the surveyed companies reported an improvement and none reported a deterioration in business conditions. The outlook on current and future demand for financial services was positive and the financial situation was regarded as satisfactory. Managers signalled a slightly slower rise in prices. Employment was expected to grow faster than previously projected.
In April 2008 the outlook in the transport, warehousing and communications sector was similar to that recorded in the previous month. 33% of the surveyed companies signalled an improvement and 10% a deterioration in business conditions. Current demand and sales continued to grow, the outlook on financial situation was positive and companies were going to create more jobs. Prices of services decreased in April but were expected to rise slightly in the next months.
The outlook in the real estate, rental, education and business services sector was positive in April. The surveyed companies expected a rise in demand for their services. 23% of the surveyed businesses signalled an improvement and 7% a deterioration in business conditions. The companies were going to create more jobs, prices of their services were expected to go up and their financial situation was expected to improve.
The outlook in the hotel and restaurant sector was unchanged. 23% of the surveyed businesses signalled an improvement and 12% a deterioration in business conditions. The outlook on demand and sales was optimistic but the outlook on the financial situation was less favourable. Managers signalled a faster increase in prices of services than previously projected. Employment was expected to rise.

Consumer confidence weakened in April, with respondents suggesting a possible deceleration in individual consumption.

In the 1st quarter of 2008, after a steady improvement since the second half of 2006, consumer confidence weakened. But the consumer confidence index is still relatively high, indicating that consumers are very satisfied with the socio-economic situation in the country and that the condition of Polish households is good.
In the 1st quarter the outlook on the households’ purchasing potential and job prospects worsened, but the outlook on the households’ capacity to save improved.
The current consumer confidence index, which describes current trends in individual consumption, and the future confidence index, which describes trends expected in the next months, worsened in the 1st quarter compared to the 4th quarter of last year. Changes in the two confidence indices may suggest that the high growth rate in individual consumption recorded in previous quarters may slow. One may expect that the households’ high propensity to buy consumer durables will diminish.

ICT use in Polish business and households is on the rise.

Research on ICT use in Poland revealed the following trends:
● Large companies (employing 250 people and more) and those involved in banking, insurance, IT and telecommunications use computers, the Internet, and computer networks and systems more frequently than other businesses. In 2006 some 93% of Polish businesses used computers, and the percentage of their staff working on these computers was 38%. The corresponding figures for the EU-25 were 97% and 51%.
● The number of companies having a website rose in 2004-2006 by 30%.
● The number of companies buying and selling online doubled in the years 2003-2005.
● In terms of broadband Internet access, Polish households are closer to the EU average than Polish businesses.
● Students, people aged between 16 and 24, people with higher education qualifications and residents of large cities use computers and the Internet more frequently than other groups of people.
● People aged between 65 and 74, those with primary education qualifications (except for schoolchildren), pensioners, the unemployed and rural people use computers less frequently than other groups of people.
The production of ICT equipment (audio and video equipment, computers and peripheral devices, electronic components and telecommunications equipment) has a growing importance in the Polish economy. In 2006 the value of ICT products manufactured in Poland was PLN24.4 billion and accounted for 3.7% of total industrial sales. Imports and exports of ICT products are on the increase but growth in ICT exports is faster than in imports.
Labour productivity in the ICT sector is by 44% higher than average productivity in the manufacturing and service sector. In the years 2004-2006 growth in spending on research and development was three times higher in the ICT sector than in the wider manufacturing and service sector.

In late 2007 and early 2008 consumer prices went up but construction prices decelerated.

According to the Central Statistical Office (GUS), In March 2008 consumer prices (CPI) rose by 4.1% year on year. The upward pressure on prices came mainly from food, liquid fuels and electricity, transport and household services. CPI inflation has breached the upper limit of deviation from the inflation target set by the Monetary Policy Council (2.5%+- 1 percentage point) and in March stood 0.6 percentage points above the limit.
The highest increase was recorded in prices of food (7%), alcoholic beverages and tobacco products (5.7%), transport (5.5%), household services (6.5%), education (3.2%) and health care (3.1). Prices related to communication, recreation and culture declined. A further decrease was also recorded in prices of clothing and footwear.
In March the annual producer price index (PPI) stood at 2.9% compared with March 2007. A major upward effect came from mining (14.3%), and electricity generation, gas and water supply (5.1%). In the 1st quarter the average increase in producer prices in the manufacturing sector was 2.1%, with producer prices of tobacco and oil products having increased the fastest (respectively over 20% and almost 30%).
Construction prices are decelerating but one should remember about the high reference level of last year. In March 2008 construction prices rose by 7.1% (the increase was slower than in the previous months when it was close to 9%). Growth in construction material prices was also slower than in previous months (7-8% versus 10-12%). Construction prices are boosted by the fast increase in construction wages. In the 1st quarter wages in the construction sector rose by over 17%.

Central Statistical Office (GUS): Prices of food, non-alcoholic beverages and household services are growing the fastest.

GUS: CPI and PPI inflation was higher in the 1st quarter of this year than in the 4th quarter of last year, but growth in construction prices was slower. As in the 4th quarter of last year, the highest increase was recorded in consumer prices of food, non-alcoholic beverages and household services. Prices of clothing and footwear, and prices of products and services related to communication, recreation and culture continued to decline. Producer prices rose the fastest in the mining sector while prices in the construction and assembly sector decelerated. In March CPI and PPI inflation was lower than in February. (“Information on the Country’s Socio-Economic Situation, GUS, April 21, 2008”)