Manufacturing in Poland is On the Rise and Attractive to Investors

Although Poland had difficulty transitioning from a communist state-run economy to a western privatized economy in the 1990s, Poland today is fighting hard to compete in the global manufacturing market. In 2015, manufacturing held 19.32% of the share of employment in Poland. Combined with a rapidly growing economy, as well as recent legislation to promote economic growth, Poland is becoming a manufacturing leader.

Fall of Communism

After the fall of communism, Poland found itself in an awkward position. Despite having an abundance of natural resources and an infrastructure to produce consumer goods, other more commercial items were lacking. Polish officials relied on grants from the International Monetary Fund to restart its economy in a more capitalistic fashion to become as attractive to foreign investment as possible.

Financial Incentives

In 1994, the advent of the Polish Special Economic Zones created substantial incentive to start a manufacturing business in Poland. Poland provides corporate tax exemptions and preferential conditions for corporations that operate in certain regions. Since their beginnings, Polish Special Economic Zones have attracted many investors, and have allowed high-profit margins for the companies operating within them. In addition to providing jobs for Poland’s massive skilled and unskilled labor force, they have revitalized communities that would otherwise still be struggling to regain economic stability after the fall of communism.

Polish leaders have not stopped at simply providing special conditions to new start-up companies. On July 2nd, 2011, the Act on Freedom of Economic Activity was passed. This bill simplifies the procedure for establishing a new company in Poland by reducing start-up fees and waiting periods. This act, combined with the Polish Special Economic Zones and the proximity of Poland to Europe and Russia makes Poland a very attractive country for new investors looking to start manufacturing companies.

Manufacturing Resurgence

Manufacturing saw a resurgence in Poland in February of 2016. Despite economists predicting a drop in the country’s PMI, Poland’s PMI saw an increase. Economists attribute this growth to increased employment and exports. Poland’s workforce is also attractive to new investors, especially in the manufacturing industry. Worker wages, are on average, less than half that of Germany’s in comparable jobs. Additionally, there’s a skilled workforce, which is ideal for manufacturing jobs.

Manufacturing Future

What is the future of manufacturing in Poland? Due to the imminent termination of the Special Economic Zone program, an influx of investors are expected to take action before that occurs. Due to a strong presence in the electronics market (Poland makes about 35% of televisions sold in Europe) and the increasing number of exports, Poland’s manufacturing industry is only expected to grow from here. According to the Global Economic Prospects report, economic growth in Poland will increase by 3.1%, up to half a percent higher than last year. Although economists are wary of how the US political climate will affect future growth, it is safe to remain cautiously optimistic.

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