Lewiatan Business Index drops two points in February

2010-03-05



The annual PKPP Lewiatan Business Index slipped by two points to 44 in February, the Polish Confederation of Private Employers (PKPP) Lewiatan announced. The quarterly index shed one point to 36.
In their commentary, PKPP experts said that the Index was clearly stabilising around the level reached last month, when it surged by seven points to return to its pre-crisis values. According to the Confederation, although latest macroeconomic data, notably on industrial output, exports, or GDP growth in the fourth quarter of 2009, give cause for optimism, suggesting that the negative trends have been reversed, private consumption is nevertheless showing clear signs of weakness, pulled down by shrinking real wages and rising unemployment. Under these circumstances, it may take several years before the economy returns to the kind of rapid growth enjoyed during the latest boom period. In the view of PKPP experts, the greatest source of strength for the Polish economy is an exceptionally resilient business sector, as illustrated by the relatively good financial results and significant efficiency gains achieved by companies during the crisis. On the other hand, the accelerating growth in unemployment and the state of the public finances remain serious causes for concern.
The PKPP Lewiatan Business Index is constructed on the basis of market prognoses prepared by Poland’s leading economists for the current quarter, half year and full year. It is measured on a 100-point scale, where a score of 50 corresponds to an economic growth forecast of 3-3.5% of GDP annually.