End of August? We are suspending
InfoCredit Microenterprise Index
In August, almost twice as many businesses were suspended as were resumed, so the InfoCredit index fell well below 0. This is the first drop since March and immediately significant. However, this is not a reason to worry, because it is a seasonal phenomenon. The number of businesses is still growing. The new/closed ratio, in turn, is strongly positive. Interestingly, traffic in CEIDG was much lower than in the corresponding months of 2019 and 2018.
Last month, 23,006 businesses were registered, 10,456 were closed. 10,128 businesses were resumed, and 19,589 were suspended – according to preliminary CEIDG data.
The InfoCredit microenterprise index, describing the ratio of new businesses to those closed, reached 12,550 points, moving away from this year’s record and the highest values from 2019 and 2018. The indicator describing the ratio of businesses reopened to those closed fell to -9,461 points. This is the lowest value since March of this year, when entrepreneurs concerned about the decline in revenues as a result of restrictions related to the epidemic massively suspended their businesses. However, this cannot be treated as a retreat from business. In the same period in recent years, there was a significant increase in suspensions, especially in the last decade of the month.
Two different index readings. What’s the deal?
The data from the entire month do not show this phenomenon well in terms of resumptions and suspensions. To better assess them, you need to look at the last decades of August in recent years. From 22 to 31.08.2018, 20,585 businesses were suspended, 6,360 were resumed. From 22 to 31.08.2019, 18,107 businesses were suspended, and 4,852 were resumed. This year’s result (13,715 vs. 3,544) is therefore no surprise. It is worth emphasizing that the indicator describing the ratio of new to closed businesses in the last decades of August 2018 – 2020 was constantly positive.
– In August, mainly those entrepreneurs who run their businesses seasonally close their businesses. This is a normal phenomenon. In turn, at the end of June, those who work from September to the end of the school year suspend their businesses. This year was similar. What will it be like in September? It seems that it should be the same as in previous years. Today, however, it is difficult to say anything for sure, because the impact of the situation related to the epidemic on the market and the labor market cannot be predicted – says Jerzy Wonka, development director at InfoCredit.
How do we calculate the InfoCredit Index?
The InfoCredit Index 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 closed businesses – a negative value. In the same way, we track the ratio of resumed to suspended businesses.