National Bank of Poland published a report on the financial situation of the business sector in the first quarter 2015 It shows that during the period considered the company's condition was good and stable and further strengthened by a higher rate of sales growth. Moreover, negative price dynamics in the economy continued to favour companies more than hindered, lowering revenues).
Total revenue dynamics accelerated with 1.6% year/year in the fourth quarter 2014 to 4.6% year/year in the first quarter 2015
1st quarter 2015 has brought about an improvement in the business sector, as indicated, inter alia, by maintaining the volume of revenue. Indeed, there were no negative developments associated with the so-called deflationary spiral, when negative inflation is accompanied by a decrease in nominal corporate revenues.
This was due to higher domestic and foreign sales dynamics (in real and nominal terms) and to higher financial revenue dynamics, especially in the area of exchange rate differences and financial investment.
Costs
During the period considered, costs increased more slowly than revenues. This was supported by relatively low prices of raw materials and a decrease in the dynamics of costs not related to core business activities (correction of high increases from the fourth quarter 2014).
Employment
Small but systematic and stable employment growth has been maintained for over a year – in the first quarter 2015 it grew by 2.2% In the sectoral breakdown, industrial processing has the greatest share in the increase in employment (close to 40% employees throughout the enterprise sector) and services (including trade). The highest employment dynamics was also recorded in these sections. On the other hand, a sharp decline in employment is still observed in construction, energy and mining.
Costs of remuneration
Together with employment growth in the first quarter 2015 wage costs have increased, as well as average wages. The dynamics of wage costs (including social security) was therefore significantly higher than the dynamics of employment (5.4% r/r). However, it decreased by 2.5 the percentage point of sq/kw, which appears to be a correction of high growth from the previous quarter (dynamics remain at the average of 2014).
Labour productivity
The rising wage costs were in the first quarter 2015 still higher dynamics than productivity. The cost of wages increased faster than revenue from sales (nominally by 4.2%). In 2014 labour productivity decreased, while in the first quarter 2015 She's growing.
This was the result of higher sales dynamics than employment dynamics – nominally, the dynamics of labour productivity reached 2% The increase in productivity dynamics was slightly higher in large companies (1.9%, after a period of productivity decline) than in the SMEs sector (1.7%).
Profitability
The percentage of profitable companies continued to grow – in the first quarter 2015 has reached the level 68.7% to 67.6% during the same period 2014 The percentage of companies with high profitability also increased (i.e. more than 5%). This means that the situation of the average company in the sample improved, and the gains did not occur solely in a group of large companies.
Total investment activity
Investment activity is still in the business sector. The high double-digit growth rate of fixed capital expenditure has already continued since six subsequent quarters. Investment activity is primarily supported by strong domestic consumption and favourable demand forecasts.
Financial result
By improving the performance in financial operations and increasing the dynamics of the result on sales in the first quarter 2015 the gross and net financial result has significantly increased by 10.8% and 9.7% r/r
Liquidity situation
All liquidity indicators are in a growing trend. Cash liquidity has increased most recently (although raw data indicate a slight decrease in the quarterly ratio). The observed liquidity ratios, except cash liquidity, reached historic maxima.