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PKPP Lewiatan: Polish firms await full recovery to start investing


Companies in Poland have stabilised their operations in 2010 and are in sound financial shape, but remain wary about investing, according to a report on the health of the enterprise sector in 2010 by the Polish Confederation of Private Employers (PKPP) Lewiatan.

The Confederation estimates that the main indicators of corporate financial health either improved or remained strong in 2010. Thus, the net financial result of companies employing 50 or more people rose 14% to hit PLN 90bn (approx. €22.5bn) in 2010, according to its calculations, while the net sales margin improved to 4.4% from 4.1%. The proportion of profitable companies increased by 0.7 p.p. to 78%. At the same time, the cash liquidity ratio – an important measure of firms’ ability to pay their bills – stayed high at 37% (after a small drop), and assessments of most types of business risk improved, with the sole exception of risk of heightened competition. However, the high cash liquidity ratio points to a major problem, namely that companies in Poland remain cautious about new investments, even despite improved credit availability. Business investment stayed broadly at its 2009 levels, according to the Confederation, and capacity utilisation stood at 80%.

The report’s authors conclude that Polish companies are waiting for surer signs of sustainable recovery before they decide to embark on major investment projects. And such signs may well come in 2011, but this will depend on the strength of global growth and on the effects of the government’s fiscal consolidation drive.

See also the news item ‘PKPP Lewiatan: GDP growth to reach 3.8% in 2010, pick up in 2011’.

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