IC index lower than a year ago
INFOCREDIT ECONOMIC ACTIVITY INDICATOR
The second quarter brought a slight increase in activity in economic activities in Poland. The InfoCredit index, describing the ratio of new and resumed microbusinesses to closed and suspended ones, rose slightly. However, it is far from optimistic. The past three months were much weaker than in the years 2019-2022. The index, counted quarterly, was much higher then.
In the second quarter of this year, there were more new and resumed economic activities (a total of 131.2 thousand) than closed and suspended ones (127,252). This is a seasonal phenomenon – this usually happens in the period April – June). The closer to the holidays, the more seasonal businesses are opened and resumed. The problem is that in the years 2019-2022 in the second quarter the predominance of new and suspended activities was much greater. In 2019 (the last before the pandemic), our quarterly index was worth +27,815 points). In 2020 (a strong rebound after a weak Q3 due to restrictions) it was worth as much as +47,601 points. Even last year, when entrepreneurs were already feeling the increasing burden (the Polish Deal and inflation caused a retreat from the simplest form of business), the index was at 16,784 points. This year it is only 3,939 points.
The same is true for our indicator on a monthly basis. Our index grew from December (then it was worth -26,867 points) to April (then +5,912 points). And this was a normal phenomenon (we usually record the greatest retreat from activity at the turn of the year). The problem is that in May it began to slide again, to take a negative value in June (-3,640 points), which we usually did not record. Usually in June the index is positive. In 2019 it was worth +3,739 points, a year later even +27,920 points (again – a strong rebound after the first months of the epidemic). Even a year ago, after very weak first months (Polish Deal, effects of the war in Ukraine), it was worth +3,575 points.
The effect? In the entire first half of 2023, we recorded fewer new and resumed activities than closed and suspended ones. The losses from the first quarter have not been made up for.
The data still shows the crisis of the simplest form of running a business. Let us recall – in 2022 (Polish Deal), a total of 347.3 thousand businesses were suspended, which was a record. 193.2 thousand businesses were terminated – the most since 2014. The main reason was unstable tax regulations and rising operating costs. It is difficult to talk about a rebound this year. Our indices are sinking lower and lower. They could be even lower if not for the support of Ukrainian citizens. In recent months, we have been recording more and more business activities registered in Poland by our neighbors. In 2022, Ukrainians established 17.5 thousand businesses in Poland (5.6 percent of all). From the beginning of 2023 to the end of May alone, 13.2 businesses run by Ukrainian citizens were registered in Poland, which means that there may be much more of them than last year. Details in the commentary Poland – a good place for Ukrainian entrepreneurship, prepared by InfoCredit and the Union of Entrepreneurs and Employers.
InfoCredit Business Activity Index
Our business activity index shows the ratio of new and resumed businesses to closed and suspended businesses. When the index is positive, it means that more businesses were established and resumed than suspended and closed. The higher the index value – the greater the tendency to open small businesses. When the index indicates values below zero, it means a retreat from this form of business activity. The more the index is negative, the more small entrepreneurs withdraw from business (definitely or temporarily). We publish the index on a quarterly basis (after each quarter) and monthly basis.