InfoCredit Microenterprise Index 06/08/2020
New businesses are still growing, the indicator is close to record values
In July, those who want to take matters into their own hands still had a clear advantage. This is true both among new entrepreneurs and those who already know the taste of their own business and have suspended it for various reasons. The holiday season did not change much here. 25,640 businesses were registered, 10,088 were closed. 15,182 businesses were resumed, and 11,370 were suspended – according to CEIDG data.
The InfoCredit microenterprise index, describing the ratio of new businesses to those closed, reached 15,552 points, remaining close to this year’s record and the highest values from 2019 and 2018. The indicator describing the ratio of businesses being resumed to those being closed fell to 3,812 points, but remained clearly positive. It has remained above 0 for three months in a row, which has not happened since the beginning of 2018. Previously, in 2019 and 2018, it was positive only twice.
Self-employed means cheaper
The InfoCredit indicator was created to track alternative forms of employment and self-employment at a time when the situation on the labor market is changing dynamically. The index, which is developed by the oldest company in Poland analyzing the economy, takes on a positive value when there are more new businesses than closures. When there are fewer than completed – negative. In the same way, we track the ratio of resumed to suspended businesses.
Data from the last 4 months confirm that the panic we saw among entrepreneurs in March was a one-off event. At that time, 48,624 entrepreneurs suspended their business activity, and 11,680 ended it. In the last 10 days alone, 28,432 businesses were suspended and 3,124 were terminated. What does this mean? We are certainly gradually adapting to the new reality. Those who were to suspend or terminate their business due to the epidemic have already done so. Today, they are gradually returning to it or waiting for a better moment. On the other hand, changes in the labor market are forcing a return to self-employment. An employee or specialist running his or her own business is more competitive on the labor market because he or she is cheaper from the employer’s perspective.
We are waiting for the holidays with resumptions
During the holiday season, the number of resumptions of business activity dropped significantly, which had an impact on the total number of applications that went through the CEIDG system. This is the lowest this year. In total, the system processed 62,280 applications from entrepreneurs, compared to 72,639 in June. In March this year, which was exceptional due to the sudden increase in suspensions, as many as 90,028 applications were submitted.
This is due to the fact that some micro-entrepreneurs, mainly those who do not employ employees, suspend their business for the holidays to simply rest. And since there is no income, they do not want to incur costs either. 15,182 businesses were resumed, compared to 25,576 in June and 23,597 in May. However, the InfoCredit index describing the ratio of resumed to suspended businesses remained positive. There was no significant increase in business suspensions – 11,370 were recorded, compared to 9,582 in June and 11,278 in May. Those who wanted to freeze their micro-businesses had already done so before the holidays. And especially in March, when the economy was frozen. Interestingly, the seasonal decline is not visible among new, closed and suspended businesses.
– This year, our index is behaving differently than in previous years. That is why it is worth following it. The best example is March. In the following months, it seemed that the economy was slowly returning to normal. There was a demand for seasonal work. Poles are eager to take vacations. What will happen next? Nobody knows and it is increasingly difficult to make forecasts. On the one hand, the June data from the Central Statistical Office on unemployment, average wages and employment in the enterprise sector were better than expected. On the other hand, in June there were 208 thousand more unemployed people year on year. That is a lot. The number of cases is growing instead of falling, so we have to return to restrictions. I think that in the coming months the data and indications of our index may still surprise us a lot – says Jerzy Wonka, Development Director at InfoCredit.
