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Jobs under growing pressure, improvement expected only in 2014


The sharp slowdown of economic activity and considerable uncertainty about the future are putting a growing pressure on jobs. Faced with a deceleration in export orders and a flagging domestic market, companies in Poland have no motivation to invest in new capacity, and some firms are implementing temporary production stoppages to deal with lower demand. Even so, the deterioration of economic conditions has yet to show up in employment figures in any significant way. The month-on-month decrease in average employment in the enterprise sector recorded in September was only a moderate one, though bigger than in the corresponding period of 2011. At the same time, a lower (though still high) comparative base prevented employment growth from sliding into negative territory on a yearly basis. For the time being employers are adopting a wait-and-see approach. They see economic activity decelerating and are concerned that the downturn could escalate, and so are not creating new jobs, but they are also refraining from job cuts as far as they can. However, maintaining employment at its current level has had its price in sluggish wage growth. The rate of wage growth has decelerated further in recent months, and in real terms has been in negative territory since July.

In our view, the observed strengthening of negative tendencies in the economy coupled with a seasonal decline in jobs could lead to a more significant deterioration of labour market conditions and a more pronounced decline in employment in the months ahead. The outlook for next year is not optimistic, either. We are in for several quarters of very weak activity, and while the economic situation should start improving from mid-2013 onwards, the anticipated recovery is unlikely to provide any significant boost to the labour market until it gathers more momentum. Its effects are therefore likely to become significant only in 2014.

Paweł Sionko
Construction Market Analyst, PMR

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