The number of companies declaring bankruptcy in Poland is rapidly increasing as the threat of recession takes a toll on businesses, according to data from business intelligence agency Dun and Bradstreet, cited by news outlet Rzeczpospolita. In the first half of this year alone, 110,500 companies suspended their operations, and this number is expected to rise to over 220,000 by December, representing a 30% increase compared to 2022.
Among the industries most affected by this surge in insolvencies is the construction sector, which has seen 27,000 companies go bankrupt in 2023. The report highlights that high employment costs, as well as surging prices of raw materials, fuel, and energy, have contributed to the sector’s struggles. Additionally, the construction industry is burdened by soaring debt servicing costs.
The trade industry, encompassing both retail and wholesale sectors, has also experienced a significant decline due to a decrease in consumer demand. More than 18,200 companies in the trade industry have filed for bankruptcy. Renata Juszkiewicz, the president of the Polish Trade and Distribution Organization, expressed concerns about rising operating costs and the impact of price increases on both retail chains and consumers.
Economists attribute the rise in bankruptcy filings to the economic slowdown and the looming threat of recession. The challenging economic environment, characterized by increased costs and weakened consumer demand, has put immense pressure on businesses, making it difficult for them to sustain their operations.
The current situation highlights the need for effective measures and support to revive the economy and help struggling businesses. As companies continue to face financial difficulties, it becomes crucial for government authorities and policymakers to implement strategies that promote economic growth, reduce operating costs, and stimulate consumer spending. These measures could include financial assistance programs, tax incentives, and initiatives to stabilize the prices of essential resources.
Furthermore, it is essential to address the root causes of the economic slowdown and the decline in consumer demand. This could involve assessing and rectifying any structural issues within industries such as construction and trade, as well as developing strategies to diversify the economy and reduce its reliance on vulnerable sectors.
Overall, the increasing number of insolvencies in Poland is a clear indication of the challenges faced by businesses in the country. Urgent action is needed to provide support and create an environment conducive to business growth and recovery. By implementing effective measures and addressing underlying issues, Poland can pave the way for a stronger and more resilient economy.