2023 Poland Outlook
POLISH ECONOMY TO BE LESS ROBUST IN 2023
In 2022 Poland’s GDP growth remained high (as much as above 5%), given the upward revision that can be seen in the historical time series. In 2023, the economy will likely be less robust due to weak consumption and investment activity. Inflation will remain in double-digit numbers in the coming quarters, though it may drop from 14,6% in 2022 to a predicted 12,6% in 2023.
GLOBAL STRATEGY IN Q1 2023
High inflation and increased interest rates should lead to weak GDP growth. Central banks have not yet completed the cycle of interest rate hikes, and geopolitical uncertainty could lead to increased volatility in financial markets for some time.
Despite uncertainty in the markets, post-pandemic realignments, and the war in Ukraine, the flow of investments into Poland will continue. With The Polish Trade and Investment Agency’s support, foreign companies invested over EUR 3.7 billion in Poland past year. That is EUR 200 million more than a year earlier and as much as one billion more than in 2020. The number of actual projects also increased by more than 20%. Last year, 126 projects resulted in positive investment decisions, a significant increase compared to 96 such projects in 2021.
The top 3 countries with the most significant number of projects were the United States (12), Germany (9), and Belarus. The sectors showing the greatest activity were: e-mobility, Business Support System-IT, R&D, the food industry, machinery, and the automotive sector. However, the largest number of projects – as many as 53 — came from the BSS-IT sector. Regarding project value, over EUR 1.4 billion flowed into the e-mobility industry.
Regarding capital investment, Germany advanced to first place by investing over EUR 1.4 billion in Poland and creating 4000 jobs. Switzerland came second with EUR 611 million in projects, creating more than 300 jobs. Japan rounded off the top three, planning investments totalling over EUR 320 million and declaring that their investments created over 1,000 jobs.
Thanks to last year’s investments and according to investors’ plans, nearly 14,000 new positions will be created in 2023. This is slightly lower than in 2022, when more emphasis was placed on process automation. The most technologically advanced projects create fewer but higher-quality jobs, offering much higher salaries. They also ensure a transfer of technology.
Recent Examples of Foreign Investments
This year Volvo announced that the country would employ over half a thousand engineers in Krakow by the middle of the decade. The Volvo hub in Krakow is to be a center for software development – from essential safety technologies to software for autonomous driving. Volvo currently operates centers in Stockholm, Lund, and Gothenburg in Sweden, as well as in Bangalore, India and Shanghai, China.
Also this year, the German Mercedes announced that from 2023 to 2027, it would spend EUR 1.3 billion to build another factory in Lower Silesia. Thanks to this investment, up to 2.5 thousand people will find employment. Engines and batteries for electric cars are already being manufactured in Jawor/Lower Silesia. The new plant will specialize in electric vans.
The development of electromobility is well illustrated not only by the decision of Mercedes but also by the South Korean firm SK Nexilis. This year saw a symbolic groundbreaking for constructing a plant in Stalowa Wola worth up to three billion euros.
The German company Viessmann will allocate EUR 200 million to launch the production of heat pumps in Lower Silesia. The company plans to build a plant covering over 17 hectares of land, nearly four times bigger than its current facility.
The Japanese firm Daikin has started the construction of a pump factory near Lodz, for which it plans to allocate PLN 1.5 billion. The plant will employ 1,000 people and is scheduled to open in 2024.
“Every year is like no other, but some years are even more like no other” is perhaps the best summary of what is to come in 2023 in Poland. A war next door, a polycrisis at home, and an election to top it all off will likely result in a year of volatility and uncertainty.
Politics will trump everything else in Poland in 2023, as the ruling right-wing coalition of the Eurosceptic United Right – made up of Law and Justice (PiS) and its more radical partner United Poland – will scramble to secure an unprecedented third straight term in office.
Should they win, further consolidation of power and more democratic backsliding are in store. In fact, governance could deteriorate well before the actual election, as the ruling camp will not hold back – or so it is feared – from any methods to ensure it defeats the opposition.
The unemployment rate in Poland in February amounted to 5.5 percent and did not change compared with January 2023. Equally low unemployment in Poland was recorded in February 2020, before the outbreak of the COVID-19 pandemic. The Polish labour market coped well with the crisis that affected the world. In fact, with the lowest unemployment in the entire European Union, Poland emerged as one of the leaders in this regard. Only the Czech Republic is ahead of us.
TRENDS IN HR
Despite rising inflation, a significant economic slowdown and geopolitical uncertainty, Poland’s labour market is still strong. Wage growth for specialists and managers was at a record high in 2022 and is expected to remain so in 2023, though these gains were still below inflation. While some employers will compensate for inflation, the majority will not do so.
Work flexibility, greater transparency of salaries, changes in benefits offered by companies, and many firms experiencing a shortage of employment candidates: these are significant trends for both employers and prospective employees in 2023.
CHANGES in the Scope of Remote Work
The Government is working on changes in the field of remote work. New legislation provides for both complete and hybrid remote work, depending on the needs of specific employees and employers. The Act will offer the possibility of employee remote instruction in particular cases. Every 3rd job advertisement provides an option of at least partial remote work; candidates value flexible schedules in Poland. They are making them conditions of employment, in fact.
The Metaverse as a New Communication Channel
According to “Recruitment Trends,” a report published by Antal International, almost ⅓ of respondents believe that the metaverse will play a significant role in recruitment, and nearly 40 percent see potential in virtual reality. However, employers emphasize that, in their opinion, the metaverse will not be a ubiquitous phenomenon.
Challenging traditional recruitment models and revolutionizing work life by unleashing community power and democratizing hiring processes lie at the heart of the recruitment business. Worldwide, over 50 million people have registered on platforms that offer work by the GIG formula, i.e. flexibly, with employees retaining significant autonomy concerning when they perform their work. 2023 will see a substantial entry of candidates into the market in search of better sources of income – and also extra employment that will bring in additional earnings. Given the state of the economy and a drastic drop in the purchasing power of money, there will be more “giggers” than ever in the Polish market.